When you decide to purchase a rental property, a lot of thought is needed about how you will run your business, from property rates, to tenant screenings, building upkeep, and more. One factor that is often overlooked is when and how you will collect rent. While we all understand that incoming rent is necessary and is the reason you invested in the property in the first place, deciding how you’ll collect rent often takes a back seat to other landlord issues. Putting some real thought into your rent collection policy can save you countless headaches, and money in the long run.
Here are some of the dos and don’ts of rent collection:
Do Create a Solid Rent Collection Policy
While stating the amount due in the lease is very important, including a rent collection policy can certainly help to clear up any misunderstandings about how, when, and how much rent is to be paid. A good policy will state the amount due, accepted payment methods, clarify when rent is considered paid, and review the penalties for late payments.
When you decide to purchase a rental property, a lot of thought is needed about how you will run your business, from property rates, to tenant screenings, building upkeep, and more. One factor that is often overlooked is when and how you will collect rent. While we all understand that incoming rent is necessary and is the reason you invested in the property in the first place, deciding how you’ll collect rent often takes a back seat to other landlord issues. Putting some real thought into your rent collection policy can save you countless headaches, and money in the long run.
Here are some of the dos and don’ts of rent collection:
Do Create a Solid Rent Collection Policy
While stating the amount due in the lease is very important, including a rent collection policy can certainly help to clear up any misunderstandings about how, when, and how much rent is to be paid. A good policy will state the amount due, accepted payment methods, clarify when rent is considered paid, and review the penalties for late payments.
Do Work with your tenants
A good renter is someone you certainly want to keep in your property. Reducing tenant turnover will lower both your costs and your risks. If your tenant falls a bit behind on rent, consider creating a payment plan and working with them to repay the amount before moving to evict. A little grace can go a long way and your property will be in better hands with a satisfied tenant.
Do Work with your tenants
A good renter is someone you certainly want to keep in your property. Reducing tenant turnover will lower both your costs and your risks. If your tenant falls a bit behind on rent, consider creating a payment plan and working with them to repay the amount before moving to evict. A little grace can go a long way and your property will be in better hands with a satisfied tenant.
Do Make Paying Rent Easy
The easier it is to pay rent, the more likely you are to be paid in full and on time. Consider collecting rent online. Your tenants will be able to pay from anywhere and at any time without the hassle of money orders, mailing checks, or dropping off rent during office hours. Online rent reminders also establish good communication between tenants and landlords. PayRent is an online rent collection service that offers convenience to tenants and protection to landlords.
Do Make Paying Rent Easy
The easier it is to pay rent, the more likely you are to be paid in full and on time. Consider collecting rent online. Your tenants will be able to pay from anywhere and at any time without the hassle of money orders, mailing checks, or dropping off rent during office hours. Online rent reminders also establish good communication between tenants and landlords. PayRent is an online rent collection service that offers convenience to tenants and protection to landlords.
Don’t Give out Your Personal Information
It is important to remember that you are running a business and that your personal information should be kept private. Never give out your home address. If you would like to collect rent by check, consider getting a dropbox or have them mail it to a P.O. Box. You don’t want a disgruntled renter knowing where you live.
In much the same way, you’ll want to keep your financial information to yourself. Don’t give out your banking account information and tell your tenants to deposit check to your account. You are leaving yourself wide open to fraud.
Don’t Give out Your Personal Information
It is important to remember that you are running a business and that your personal information should be kept private. Never give out your home address. If you would like to collect rent by check, consider getting a dropbox or have them mail it to a P.O. Box. You don’t want a disgruntled renter knowing where you live.
In much the same way, you’ll want to keep your financial information to yourself. Don’t give out your banking account information and tell your tenants to deposit check to your account. You are leaving yourself wide open to fraud.
Don’t Accept Partial Payments
While this is generally a good rule of thumb to have, during the 2020 eviction moratorium, you’ll want to ease up on your stance. Typically, accepting a partial payment can halt or restart a lengthy eviction process so you’d want to be wary of accepting partial payments. If you are working with a tenant right now who has been affected by coronavirus or the effects on the economy, you’ll want to accept all payments so that your tenants are not as far behind come January when the moratorium wears out.
Do Accept Credit Cards
When cash is tight, having the option to charge all or a portion of the rent can really be helpful to your tenants. While credit card rent payments will often come with a fee, the fee is often minimal compared to a late fee imposed by a landlord, the cost of a payday personal loan, or charges associated with bounced checks. Give your tenants some wiggle room by allowing them to pay their rent with a credit card.
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Don’t Accept Partial Payments
While this is generally a good rule of thumb to have, during the 2020 eviction moratorium, you’ll want to ease up on your stance. Typically, accepting a partial payment can halt or restart a lengthy eviction process so you’d want to be wary of accepting partial payments. If you are working with a tenant right now who has been affected by coronavirus or the effects on the economy, you’ll want to accept all payments so that your tenants are not as far behind come January when the moratorium wears out.
Do Accept Credit Cards
When cash is tight, having the option to charge all or a portion of the rent can really be helpful to your tenants. While credit card rent payments will often come with a fee, the fee is often minimal compared to a late fee imposed by a landlord, the cost of a payday personal loan, or charges associated with bounced checks. Give your tenants some wiggle room by allowing them to pay their rent with a credit card.
