Nearly 80% of rental properties are owner-managed, while the rest have property managers running them. Managing your properties helps you save money, but it also leaves you with headaches, stress, and problems.
One of the top problems landlords face is rent collection. As a result, you might encounter tenants who don't pay their rent.
So what should you do when this happens? What steps can you take to collect the rent?
Here is a guide describing the steps you can take when this happens.
Send a Letter
The first thing you can do to collect rent is send a letter to the tenant. You can mail it or attach it to their apartment door.
The letter can state that the tenant's rent is late and serves as a friendly reminder for them to pay it. In some cases, tenants might forget to pay their rent and will willingly pay it after getting the letter.
Charge a Late Fee
Secondly, you should always charge a late fee when tenants pay rent late. Most people don't want to pay an extra fee for their rent, so they'll pay it on time to avoid the fee.
Therefore, charging a late fee reinforces your guidelines and encourages tenants to pay on time. Your lease should include the late fee guidelines, so the tenants know.
Work Out an Arrangement
While some landlords believe that working out payment arrangements is one of the top rent collection mistakes, it can work in some cases.
Working out a payment arrangement gives the tenant a little extra time to pay their rent. However, this arrangement should have deadlines and consequences.
In some cases, tenants just need a little more time to pay their rent, and many won't make this mistake again. But some tenants might push this flexibility, wanting special terms every month.
File an Eviction
If you read landlord tips, you'll discover that filing an eviction is often the only thing you can do when a tenant has late rent. Some tenants won't pay their rent due to financial issues, and it's often better to evict them.
Of course, you must follow the legal eviction process if you want to use this process.
Improve Your Tenant-Selection Process
One of the best things you can do is prevent late rent through effective tenant-screening procedures. For example, do you run background checks on every applicant? If not, you should start.
Choosing high-quality tenants will improve your rent collection efforts. Good tenants pay their rent on time every month. If you can weed out the bad tenants, you'll face fewer challenges with rent collection.
Hire a Property Manager for Rent Collection Services
Rent collection is a crucial part of a rental property business. After all, this money pays the bills. So if you're having trouble collecting rent, you should consider turning to a property management business for help.
Contact us at Homeriver Group in Southern California. We can help you improve your rent collection efforts and assist with other tasks.