Every Atlanta landlord desires prompt rent paying tenants. However, that is not always the case. Some residents end up making late payments, while others miss payments altogether. If you ask them, all of these tenants have justifiable reasons for doing so. Well, some of the reasons are genuine, and you might wish to empathize with them. The bottom line, however, is that the success of your real estate depends on your ability to collect rent from your tenants on time. If you are an Atlanta landlord struggling to get your renters to pay on time, here are a few tips you can use.
7 Rent Collection Tips:
Carefully screen tenants
A primary reason owners end up with rent defaulters is inadequate or lack of thorough tenant screening. Many owners, eager to fill their rental properties, quickly accept any tenant that shows interest, without even conducting background checks. As a result, they end up with tenants who either cannot afford to pay the rent or are poor at meeting their financial obligations.
Avoid falling into a similar trap by thoroughly vetting all prospective renters and only qualify those that earn more than three times the monthly rent, have an excellent credit score rating, and flawless previous landlord references. Such tenants will always pay up promptly and also take good care of your investment.
Make it clear on the lease agreement
The lease agreement is what defines the nature of your relationship with your Atlanta tenant. Moreover, whatever rules or clauses you put on the contract will be binding to both of you. For this reason, make it clear to your residents through the agreement what your expectations are in as far as rent payment goes.
The rental agreement should include what the monthly rent amount is, the due date, as well as the methods of payment. Furthermore, you need to highlight what the repercussions are in the event of late payment. For instance, does it attract fines and how would you calculate the fine?
Inform your tenants of the consequences of late payment
It’s not just enough to tell your residents that they will get fined for late payments. You need to inform them of all other consequences and steps you are willing to take to ensure you get your due rent. For instance, let the tenants know that if they default for three months in a row, you might report them to the major credit agencies in Atlanta. The thought of having a negative credit score will compel the tenants to prioritize their rent paying. While this approach might seem mean, the rationale behind it is not to punish the residents. Rather, it hopes to ensure that only those who can afford your units occupy them.
Introduce automatic rent payment solutions
One of the most efficient methods to ensure your tenants pay their due rent promptly is to include direct debit or electronic rent payment solutions like auto-pay or auto-deduct systems. Such solutions automatically deposit the rent into your bank account at specific pre-set dates.
It is a useful rent collection strategy since it eliminates human error factors such as the tenant conveniently forgetting to pay the rent.’ Some of the automatic rent payment options include using automated clearinghouses, online bill-payment methods, and postdated checks.
Talk to the tenants who don’t pay on time
At times a good renter might consistently fail to make payment on the due date, for varied reasons. For instance, it could be that the person forgot when the due date is, or perhaps he or she receives their income way past your due date. As a result, the person might either fail to make payments yet he or she had the money when it was due, or may be unable to pay because of delayed income.
Before getting upset with such tenants, take the time and talk to them to unearth the underlying reason. After which you could decide to remind the forgetful renter of the due date, and consider changing the due date for the one whose income comes in late. Moreover, make a habit of talking to your tenants and informing them about the importance of making on-time payments.
Give incentive for prompt payments
A novel way to make your Atlanta residents to pay their due rent promptly is by rewarding those who do. For instance, you could give small discounts, prizes, or end of year gift vouchers to those who pay on the due date.
By paying their rent on time, the tenant makes it easy for you to get your money without you having to spend too much time and resources chasing payments. When a resident knows he or she will get a reward or discount for early payments, he or she will need no further prompting to pay.
Get rid of tenants who have difficulty paying
While tenants can have valid reasons for defaulting on payments, you are in business to profit. Do not allow problematic renters to stay on your Atlanta property if they consistently miss the due date. In this case, you do not have many options but the best solution is to terminate the lease or evict the tenant.
Of course, no one wishes this to be the case but at times it is necessary. For that reason, it is imperative you implement all the strategies above to minimize this outcome as much as possible.
If you don’t have the energy to chase after tenants for their rental payments you can always hire a property management company to handle this for you. If you find a great property management company you can simply sit back, relax, and have them collect the rent for you.
We hope this helps!
Keep reading for more landlord tips!