It’s the first day of the month, and only 2 tenants paid their rent…..
As a property manager, your overall tasks can be overwhelming, but one of the most stressful is collecting rent on-time and the need to chase tenants to do so. Unfortunately, it’s an aspect that many landlords have little control over. Losing opportunities is inevitable if you don’t develop a consistent and organized way of ensuring that renters are paying on time.
Here comes a new month, a refreshing moment to start it enthusiastically but wait? Half of your tenants haven’t paid the rent yet? Maybe this month won’t be as refreshing as you thought.
Don’t worry property managers, we will re-instate the enthusiasm and make your months even more refreshing, by ensuring your bank account is loaded on the first day of every month.
Stress no more, here are 4 tips to help you finally get your rent settled on-time and every month.
1. CHOOSE TENANTS WISELY
Sometimes, the reason you are having a hassle collecting rent from your tenants each time is because you chose wrong tenants. Screening process of onboarding new tenants is very vital and plays a big role for delayed rent, for example, if your renters have unstable income, and can barely afford rent, and you never asked for their payment history at previous premises, do you think they’re likely to pay rent on time? Avoid such issues by always having an accurate screening process, which will help you identify renters with good credit ratings, sufficient income and a clean history of rent payment. Always check references, credit and backgrounds to ensure your next tenants will not make your job even harder.
2. AUTOMATED PAYMENTS
With the technology era booming, take advantage of it by automating rent payment, which is the most effective way to get tenants to pay on-time. Through such solutions, you will not have to worry about a tenant forgetting to pay since the amount will automatically deduct when it is due. Just as any human, tenants can get distracted and forget to pay the rent, an excuse? maybe, but automatic payment ensures there is no room for human error, tenants don’t have the option to forget anymore, so landlords can sit back and relax.
Methods used could be post-dated cheques throughout the lease period, landlords can cash the cheques in the beginning of each month. However this traditional method can make tenants feel uncomfortable paying multiple cheques, specially if they have an annual lease. Tenants can also use their banks to deduct the rent on monthly basis, if the service is available, but banks usually take a big chunk of commission on transactions. The optimum method is using an online payment platform like Ajar Online; Designed for the real-estate market, landlords can easily set up their accounts and allow their tenants to securely pay their rent in less than 60 seconds through a SMS and/or email link, and at their own comfort anytime and anywhere. In additional, a complete property management solution allowing landlords to be organized and reduce 50% of admin costs and time. The greatest thing about automation, it includes automatic reminders and receipts, so copious paperwork and tiresome filing is no longer needed.
The best thing a landlord can do, is maintain the good tenants. Don’t get distracted by chasing around troublesome tenants, and forget the good ones who should be rewarded. For example; set $10 aside for a tenant every time they pay on time, and at the end of a certain period, reward them with a gift card of some sort. A small gift like an online coupon won’t cost you so much, and the good tenants deserve gratitude. If you have a tenant who always pays rent on time, follows the rules, and takes good care of your property, show them some appreciation, this will make them more committed towards you and appreciate you as their landlord. Simply, if you can’t find great tenants, maintain the ones you have.
4. CLEAR COMMUNICATION
Playing Chinese Whispers proves this point, communication is the key. You can easily assume why your tenant isn’t paying, are they forgetting or just irresponsible? Maybe your tenants are unclear about the rent collection policy, always ensure this is communicated effectively before assuming;
- Amount due and the due date
- Acceptable payment methods
- Late payments charges and consequences
Sometimes an honest talk is in need, approach them and open a dialogue. You may find out the tenant gets paid after the first of the month, and needs a few days to settle. Such honest talks is appreciated and can fix a lot of issues. Be clear with your expectations and both you and your tenants will have a much better experience. Remember, the goal is to establish a good relationship with the renter and to encourage the behavior you want.