Getting Your Tenants to Pay Rent On Time
Dealing with late rental payments can be a frustrating and emotional experience for landlords. Not only does it risk disrupting your cash flow, in a worst-case scenario, it may lead to an expensive and drawn-out eviction process.
Here are our tips on getting your tenants to pay their rent on time:
It’s crucial to express the importance of paying rent on time early on, ideally before the lease is signed. Make the on-time expectation clear to them from the start, instilling good habits moving into your relationship. This is also a good time to assess your future tenant’s reaction to your firm insistence of punctual payment.. Communicating this early on will help keep your tenants accountable, and resolves the common misconception that paying a couple days late isn’t a “big deal”.
Explain Late Fees
Review the late penalties with your tenant, and explain that late payments will not be taken lightly. There are different limits on late fees depending on the state/province, but a common practice is to charge a daily rate until the payment is received.
Offer Rental Discounts
Give your tenant an incentive to pay early by offering them an early rent discount. If they are able to pay the rent on or before the due date, reward them with a small discount (usually about $10-50) off their rent.
Sometimes, a tenant misses a payment because they’ve simply forgotten the exact date that rent is due. Send your tenants a gentle monthly email reminder a couple days prior to the rent due date.
Make It Convenient
A recent US survey showed that 78% of residents polled preferred paying their rent online or electronically. Accepting online payments from your tenants is not only in high demand, it’s also easy to set up, secure, and can be customized to automatically notify the tenant when rent is due.
Maintain a Good Relationship
When you’re a landlord, the tenant becomes your client and you should respect and treat them as such. Taking the time to know them, responding to their inquiries, and keeping an open line of communication goes a long way in nurturing reliable tenants. Remember, a tenant who is deciding between several late bills is most likely going to pay the person who they have a good relationship with, first.
These strategies encourage tenants to pay their rent on time right from the start, and minimize their risk of late payments before they happen.
Next week on the blog, we will discuss how to deal with tenants who do make a late payment or even worse, habitually make late payments.
Have you ever had to deal with habitually late rent payments? What actions did you take? We’d love to share your stories!
(Photo Credit: Flickr user, miuenski)
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