January 15, 2021
It sounds like it should be simple. On the first of the month, you collect rent from your tenant. Easy. Well, unfortunately, it doesn’t always go like that. With so many different payment options and life scenarios collecting rent can become a giant headache. Here are some common rent collection issues to avoid:
Accepting Partial Payments
Let’s say your tenant owes you $1100 each month. This month they’re short and can only pay $800, but promise to pay you the rest in a couple of weeks. Don’t do it. You’re essentially telling the tenant that paying the full agreed-upon rental amount is unnecessary and that the due date is merely a suggestion. If you absolutely must accept a partial payment, make sure your tenant understands that they will be charged a late fee. Failing to do this will make it more likely that it will happen month after month, and you will constantly be chasing your tenant for money.
Failing to Charge a Late Fee
When the tenant signs their lease, they agree to pay their rent by the first of the month. Some landlords offer a grace period, and others do not. But, if their rent is not paid by the agreed-upon time, they will be charged a late fee.
Did you know that it is illegal to charge a late fee in some states and municipalities? There are also limitations to the amount you can charge and how the policy is enforced, so you need to be careful to stay within your boundaries. However, charging a late fee is something you should be doing to ensure your tenants will pay you on time each month.
Allowing Rent to be Mailed
Sending a check through the mail used to be the preferred method of payment, but now there are so many other, more accessible options. Mail can be unreliable, and even when a tenant thinks they mail their payment with plenty of time to spare, delays with the postal service make it late. That can cause confusion between you and your tenant, and it is best to avoid it.
Instead of allowing payments to be sent by mail, you can set up online payments, which is the easiest, most convenient way for tenants to pay. Your tenant can even set up their payments to be automatically withdrawn. If you have quite a few tenants, there are quite a few different programs available to help you stay organized and keep on top of who has and has not paid.
How Do I Avoid These Issues?
The easiest way to avoid the issues is to hire a property management company. We have seen everything and are prepared for any situation regarding collecting rent payments.
We are aware of all local regulations on rent collection. We have an accessible payment portal for your tenants to make payments through.
Here at Real Property Management, we can take care of this and so much more for you. If you have an investment property and would like to hear your options, contact us to get started.
