How Landlords Can Effectively Collect Rent From Tenants

Businessman collecting rent conceptCollecting rent should be easy. Unfortunately, there are tenants who cannot keep up with payment schedules, making the process difficult for landlords. Despite regular notices and eviction warnings, some tenants still pay beyond schedule.

MS Webb & Co. suggests that you do the following to make the job easier:

Penalise late payments

Nobody likes penalties, even stubborn tenants. Establish a penalty procedure and be sure to include it on the lease contract. Start by setting a payment schedule or period, so tenants know when they should pay and when their rent is due. Assign a penalty fee for every late payment and state it on your tenant’s monthly billing.

Offer discounts

If you don’t like penalising tenants, then have it the other way around. Offer rental discounts to encourage tenants into paying early or right on schedule. Be wise about it, though. Set the monthly rent a little higher so the discounted amount still falls under your property rate.

Choose the right tenants

Only rent to qualified tenants with a good rental history. Run a background check on the applicant’s credit ratings and establish an income requirement that is three times the amount of rent or more. You should likewise obtain a credit report to check past debts. References, in addition, are a great way to determine the applicant’s behaviour. If you have good tenants, collecting rent would be easy.

Hire a collection agency

Hiring a collection agency that can provide rent recovery services is ideal if you manage numerous properties. An experienced agency can guarantee the consistency of payment collections and handle stubborn tenants in a professional manner. Other than enhancing your business, this takes away the stress of rent collection.

Managing a rental property can be difficult, particularly when you have to deal with stubborn tenants. Guarantee the income of your business by establishing rules and regulations or by working with a certified rent collection agency.