Tenants paying rent is good—but getting them to pay rent on time is better. We know that, as a landlord, you’re in a difficult position: you want to keep your tenants happy, but you also need to get paid on time to keep everything in check! Lucky for you, there are ways for everyone to get what they want: here are 5 tips that’ll allow you to stay on top of your rent collection, while still keeping your residents comfortable.
Do you know when when you create an online account somewhere, you click “accept terms and conditions” without so much as glancing through them? Don’t lie, we all do it. We’re going to let you in on a little secret—your tenants are probably doing it with their leases. So the first way to ensure they follow through with their rent on time is through communication: you should make sure you’re super clear about when the rent is due, and any consequences if it is late. Consider walking them through the lease agreement on the phone or in-person: this way, you can both rest easy knowing there’s been no confusion and everybody knows what they’re getting themselves into.
Make it easy
The best tenant-landlord relationships make the renting process easy for both parties. Are there ways you could make rent payments easier for your tenant? Maybe you could renegotiate payment terms: if they’re nervous about paying rent in 3-month installments, would a month-to-month system work better? There are also a lot of problems that come with using an inconvenient payment method like post-dated checks. First off, you may as well ask them to pay it by carrier pigeon—who even has a checkbook anymore? But beyond that, using checks means there could be issues with matching signatures, or changes in personal or bank details. These kind of mishaps typically mean it’ll take longer to resolve the issue, and it’ll end in late payments for you. In this world where nobody is ever without a computer or phone, taking the payment process online may be faster and more efficient for you and your renter. Plus, you’ll get your money when you actually need it. Cha-ching!
Enforce a late fee
We know, we know, you don’t want to be the bad guy. But landlords worldwide often stipulate in their lease agreements that tenants can be charged a fee when a rent payment is late. If tenants are clear about this, they’re more likely to pay their rent on time. Plus, by enforcing the late fee, you show your residents that you honor the tenancy contract and truly care about providing the living experience they signed up for. Don’t forget to always check in with your tenants before charging them a late fee—just in case the bank transfer is just taking longer than expected, or another issue outside of the tenant’s hands is what’s delaying the payment.
Offer them an incentive
Neuroscientists have found that when it comes to motivating action, rewards are more effective than punishments. In line with that, your tenants might be more motivated to pay rent on time if you offer them something in return. Some landlords offer a small discount to tenants if they pay their rent on time (or early), or even give them one month rent-free. It’s a win-win!
Give them two chances, not three!
We know life is messy sometimes. Your tenant might experience a difficulty or emergency at some point, and may need to turn their rent in late. While you might want to excuse them for that, you need to make sure they know it can’t happen all the time. By enforcing a rule in the tenancy contract that stipulates they cannot be late on their rent more than twice a year, tenants who make late payments a habit will be aware that their tenancy could be jeopardized. This may actually encourage renters to renew their lease with you, because they know you’re willing to forgive them and give them another chance if they’re late once. Flexibility within limits!
Hopefully these tips will help make your tenant’s late payments a thing of the past. Or you could just sit back and collect rent with Urban. Learn more about listing your home here.