Collecting Rent on Time

Mar 10 2015 / 10:26 pm Was written by Atwell & Co. No Comments Yet
MONEY STOCK

The biggest component of a property owner’s cash flow is their aptness to collect rent on time. Supervising or managing a rental property can be a bankable business as long as the owner collects their tenants’ rent on the dot. Tenants pay their rent each month as a part of their lease agreement in exchange for living in your property. As a landlord, you must inform your tenants the policy or methods for collecting rent on time. Consistency is one of the best policies to prevent late rent. Use these tips to ensure you always get your rent on time.

Tenant Screening

Protect your investment by making sure that you select the right tenant. Look for a financially responsible tenant and make sure, he has a great rental history. You can obtain this information by screening process. Ask them their personal information and references that you can contact to know more about them. You have them fill up an information form and make sure that they know the reason whys it’s collected, to whom do you share it with and they must have the right to access the given information anytime. You can avoid tenants who pay late or not at all; those who ruins your property or other landlord nightmares, by properly following your solid screening process. Don’t forget to look for a tenant who is financially responsible or whose monthly income is more than two and a half times the monthly rent.

Set Ground Rules

Your ground rules and criteria must be crystal clear from day one. Use a written lease or monthly rental agreement to file as evidence in case your tenant “suddenly” forgot what you agreed on. Document all the important facts including how you handle tenant complaints, what you expect in terms of rental amount, due and frequency of payment, penalties for late payments, and the like. Spell out exactly what you expect and what they should expect.

Automatic Payments

Set up automatic payment system. This is the best way to provide assurance that tenants pay the rent on time. This avoids any excuse you get from them. Create an unbiased payment system of setting, collecting and returning security deposits to the tenants. To dodge disputes over security deposits, you should document the status of the rental property before the tenant moves in.

Maintenance

As a landlord, you must ensure that your rental property is habitable and meets all security and health demands. Not keeping your rental property in good condition will alienate good tenants. Repair any problems in the property so you can avoid any complaints from the tenants. You can charge them for any damages in your rental property caused by them or without giving you any notice before moving out.

Avoid Cash Payments

A landlord should never accept a cash payment. There are a couple of reasons why. One reason is, cash payments could get lost easily and it could be stolen or misplaced. Another reason is, cash payment don’t leave effective, and consistent paper trail for records. You should definitely state in your rental agreement that cash payment is not acceptable.

Rent Collection Policy

Make sure that your rent collection policy is very clear. You can hand over a written information in the lease of the payment details to the tenants. The written instructions of the lease of payments must include the exact rental amount, the frequency of the payment, where it should be made and payments methods. Ensure that these terms are non-negotiable.

One Payment from Shared Tenants

If you have a group of household or more than one tenant living in your rental property, then you must demand that only one single payment must be made. You must never accept part payments when one shared tenant fails to pay his or her share of the rental unit.

Late payment

Find out the reason as to why a tenant is late in paying the rent on time. You must always apply the rules about late payments. If ever you are allowed to issue a breach, it can always be revoked. You can issue them a notice to vacate if by the 15th day they have not paid the rent yet.

Paper trail

You must record and keep a file document to all the communications that you have with your tenant. You should write it down or the tenant should be in writing so that both of you can have a record. You can always access these records should there be a case of legal action that needs evidence.

Renewal

A wise landlord will never renew the lease of a tenant who has made late payments. Don’t let emotions get in a way of your business decision. Do not renew lease of your tenant whom you always have to chase to pay their obligations.

Reward Tenants

A good tenant who is responsible in paying your rent on time, who takes care of your rental property well and being a good neighbor deserves an award. It doesn’t have to be extravagant. You can give them cinema tickets or invite them to a dinner. Keeping them comfortable and happy may motivate them to renew their lease.

Securing your property and tenants is a must. Take legitimate steps to protect it by checking your property’s security. Install useful lights especially in dark areas of your property and also trimmed landscapes to avoid lurkers.

It is required by state law that you should notify your tenants for at least 24 hours whenever you decide to enter their rental unit. Provide as much notice as possible. These are the ways for collecting your rent on time and some of the best ways to deal with troublesome tenants.

Atwell & Co Real Estate
Unit 6 / 29-30 Grattan Street Prahran, Victoria 3181
Phone: (03) 9510 6203 URL of Map