On-time rent collection is an important part of your investment strategy when you’re renting out a property. You need to make it as simple as possible for your tenants to pay, and you have to ensure you have a consistent and enforceable rent collection policy.
Rent collection is one good reason to work with professional Golden property managers. Most management companies will have a sophisticated software system that allows residents to make their payments online through a tenant portal. At Laurel Property Services, we even accept utility and security deposit payments online. It provides a seamless, convenient, and efficient process for us and our residents.
Today, we’re sharing some rent collection tips that may help you get the rent paid consistently on time and with minimal hassle.
Reference Rent Collection in Lease Agreements
Include your rent collection process in your lease agreement. You’ll need to provide all the necessary information about rental payments and how they are handled. The lease should include information about how much rent is due, when the rent should be paid, how it can be paid, and whether there are grace periods in place. You’ll also need to provide information on the penalties for paying late, which might be a late fee and lead to eviction.
Be specific and clear. For example, perhaps rent is due on the first of the month, and then considered late on the fifth of the month. Late fees should be a percentage of the unpaid rental amount. Stipulate all of that in your lease.
Lease Enforcement Includes Rent Collection
Once you have the rent collection policy in writing, it’s important to enforce it. This is easy for a professional property manager, who can track rent payments, send the proper notices, and charge the necessary late fees. Don’t make excuses for tenants or allow them to take advantage of you. If you let your tenants pay late one month without consequence, you’re going to leave them thinking they can always pay rent late.
In a normal Golden rental market, there’s no reason not to stick to the letter of your lease. With the COVID-19 virus resulting in an eviction moratorium for residents who have been financially impacted by the pandemic, you may have to work with tenants who cannot pay rent or are struggling to pay on time every month. Work with them and try to get payment arrangements in place. Collect what you can.
Offer Different Rent Collection Methods
Most tenants today prefer paying for everything electronically rather than writing out checks and looking for stamps and envelopes. No one wants to go to a mailbox or drop off rent in person. Property management companies like ours provide online portals for tenants to easily pay rent. You’ll want to consider providing a similar service if you’re managing your own rental home.
Remember that while this is often the preferred way to pay, it’s not the only way. Some of your residents may not be as comfortable with technology, so give them other options when it comes to paying rent. Let tenants pay with a check or a money order if they’d prefer. As long as your tenants have options, they’re likely to meet their rent payment obligations.
We can help you get your rent paid on time in accordance with your rent collection policy. If you’d like to talk about our professional Golden property management and leasing services, contact our team at Laurel Property Services, Inc.