As a landlord, you need to be able to rely on your tenants to pay their rent. When tenants struggle with their personal finances and fail to pay their rent, you can easily run into serious financial problems of your own.
That’s why it’s crucial for every landlord to understand the various rent collection problems that commonly occur. If you learn to spot the signs of these rent collection problems, you may be able to avoid the hassle and stress of late rent payment.
Here are the most common rent collection problems along with some suggestions on how you can avoid these problems in the future.
1. Poorly Stated Rent Policy in the Lease Agreement
Most rent collection problems stem from a vague, poorly written lease agreement. The lease agreement is the document in which you and your tenant will formally agree on the terms of the lease. Some important things to include are:
- Monthly rent. Specify the exact rental amount, when it is due, and how it is to be paid.
- Grace period. If you are implementing a grace period, clearly state how this grace period works in practice.
- Set consequences. State the consequences for late payments, including late fees and potential evictions.
By clearly specifying how much rent is owed, and when it is due, you will avoid arguments with your tenants about rent. By including specific details about any grace period and the consequences for late rent, you will further reduce your risk of any rent collection problems.
2. Accepting Partial Payments
Many landlords fall into the tempting trap of accepting partial payments. It can be tempting to be lenient when your tenants are struggling to come up with the full amount. Plus, you may need the partial payment to tide you over financially until the full amount is ready.
However, accepting partial payments can send a dangerous signal to your tenants. When they realize that you are tolerant of this kind of behavior, they will be likely to become too relaxed about their monthly rent. You may find that the situation starts to occur more and more frequently.
3. Not Offering Payment Solutions
While you do need to be strict with your tenants and follow the same protocol in each scenario, this doesn’t mean you can’t have a somewhat generous solution in place for tenants experiencing financial difficulty. If you follow the same payment solution policy for each tenant, you will get the reputation of being a generous and fair landlord, while avoiding being taken advantage of.
You may wish to implement a system where tenants can choose whether they pay by the week or the month, for instance. By being flexible about how or when your tenants pay, you may find that they find it easier to make their payments on time.
4. Poor Tenant Screening
The truth is, most rent collection problems are inevitable and avoidable. In some cases, the tenants you chose are simply unsuitable and will eventually find it difficult to make their monthly rent payments. Often, this is no fault of you or the tenants – you are simply a bad match financially.
A good tenant screening process should ensure that all of your tenants are financially prepared to pay rent each month. Tenant screening is a system that checks a tenant’s credit score, income stability, personal references, and general reliability. A good tenant screening process will help you to choose tenants who can always make their rent payments in full and on time.
Use a Property Management Service: Contact Del Condominium Rentals
Avoid the stressful job of rent collection with the help of a property management professional. Our team of experienced property managers at Del Condominium Rentals is here to help you with all of the burdensome jobs that come with being a private landlord.
From collecting rent and finding good tenants—to inspecting the property, we take care of all of it. Our wide range of property management services include:
- Professional, selective property marketing
- A reliable tenant screening process
- Dependable and strict rent collection
- Day-to-day maintenance and repairs services
- Optimized rental value
- Routine property inspections and evaluations
- In-house legal compliance and eviction procedures in place
With Del Condominium Rentals, you can rest assured that you always get your rent on time. And, if any problems do arise, our in-house paralegal team can help mitigate potential problems before they escalate. If you’re ready to find out more about how you can maximize the profits and potential of your property, please contact us today by calling 647-952-3644 or drop us an email at firstname.lastname@example.org to learn more about the services we offer.
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