Rent collection can be less of a hassle if you follow these simple steps:
The best way to not have to worry about collecting late fees from your tenants is to avoid them in the first place. Because a tenant has a great personality, regularly goes to church, or is a distant cousin doesn’t mean they won’t fail to pay the rent on time. So don’t skip the tenant screening to find out how well the prospective tenant paid his last landlord.
Make it clear, make it tough
One of the best deterrents to avoiding late rent is to have a policy that is clearly stated in the lease. Outline when the rent is due, when it is late, what is the late fee, when does it start, and what actions you will take if the rent check bounces. Be sure to include any exceptions, such as an allowance for holidays and let the prospective know that no other exceptions will be made other than the ones outlined in the lease.
Reward good behavior
Sometimes incentives can work just as well as deterrents for rent collection. Consider including an incentive in your lease that rewards the tenant for paying on time for a year, and include the reward if the tenant renews the lease for another year.
Don’t feed the habit
Of course, there may be understandable reasons that you would break your own rules as in the case of the death an immediate family member, but don’t fall for unsubstantiated excuses .Once you have allowed a late rent without penalty, your tenant may try to get away with it a second or third time. Other tenants may even hear about the exception and try it themselves. Be firm and require the reason in writing.
Heed the warning signs
You might get a call a few days early saying that work is slow, or financial problems are adding up. This is a red flag moment. You might want to suggest that your tenant shouldn’t add to their problems by getting a bad mark on his (or her) credit score by having a late rent added. That statement alone might avoid a late rent situation. The call may be just to ‘feel out’ how firm you will be about the late charge and further action, so be sure to state that you will follow the terms of the lease contract.
If nothing else works for rent collection, you might need to post a ‘Notice to Pay or Quit’ telling the tenant that legal options will be enforced unless rent is paid immediately. Hopefully, you won’t have to evict, but the tenant will be well aware of the inevitable consequences of their actions.