How to Reduce Late Payments and Collect Rent on Time
Late rental payments are an inevitable downside of being a rental property owner. Despite rigorous tenant screenings and credit checks, situations arise, and late payments can become habitual. Knowing how to reduce the likelihood of late payments and encourage renters to pay on time can help address one of the biggest hassles of owning an investment property.
Simplify the Process
If you want to spend less time arguing with renters over timely payments, make paying the rent as convenient as possible. Offer online payment options, or, better yet, automatic ACH debits from a bank account each month. Another possibility – though admittedly less popular – is taking 12 post-dated checks at the time of lease signing – one for each month over the course of the lease term.
Automation can also help increase the likelihood of on-time payments. Create a reminder system or send push notifications via an app to renters to remind them of the date. When make paying as convenient as possible, you increase your likelihood of receiving those payments on time.
Screen Each Applicant Thoroughly
Though most property owners understand the value of the screening process, some are not as thorough as they could be in the interest of expediency or convenience. Be sure to check references, including employer or past landlords. If a candidate is young and does not have sufficient credit history, consider requesting a cosigner as an extra layer of security. Finally, ask for bank statements or pay stubs to ensure that a candidate is in a financial position to reliably pay the rent. Remember, under the Fair Housing Act, you must use the same screening process for all applicants.
Increase Communication With Late Payers
If the late payment of rent becomes habitual, take steps to increase the communication with the tardy tenant. Tailor reminders and, if possible, find out why the late payment is occurring. There may be a special circumstance that justifies adjusting the timeline so a tenant pays on a different day that works with their budget.
What Are the Benefits of Having a Property Manager?
Having a quality property manager can take the hassle out of owning and renting a property. The benefits of having a property manager are numerous – for example, they take on all aspects of the screening and rent collection process. Home 365’s tenant management system allows applicants to view reminders and report problems with ease. With other features like online payment, Home 365 makes owning investment property a breeze.