Being a landlord sounds appealing to most people, especially when the idea of passive income comes to mind. However, too many people rush to place people into units and then struggle to collect rent from their tenants. These new landlords think they can get rent payments easily without considering what it takes to get paid on time.
Tips for collecting rent
When it comes to getting tenants to pay their rent, the image of a tough landlord pounding on doors and demanding money might come to mind. This is how Hollywood portrays rent collection, but it is very far from if you do it right.
Keep reading to see how to collect rent payments on time, every time.
As the saying goes, “Prevention is the best medicine.” You can apply this logic to your rental properties when it comes to placing tenants. By preventing bad renters from moving in, you can minimize the risk of them missing their rent payments.
Here are some tips for finding the best tenants:
- Check their financial standing: Run a credit check to see if the tenant pays their debt. Ask for paystubs and bank statements to ensure they earn at least 3x the monthly rent.
- Ask for a reference: Speak with the prospective tenant’s previous landlord. See if they paid on time, had any problems, or caused any damage.
Set clear expectations
Tell your tenant exactly when you expect to receive rent payments. Most landlords expect rent on the 1st of the month but offer a 2 to 3 day grace period. If rent isn’t received by this time, the tenant must pay a late fee. This fee is usually something like $25 per day until rent is paid.
Explain what penalties occur should their payment method fail. For example, a bounced check may result in a $200 fee. Provide information on what steps you’ll take if the tenant does not pay. Speak with an attorney in your area to see how to evict tenants in your city and state legally.
Make it easy to collect rent
Paying rent should be effortless for your tenants. People tend to put off things that seem difficult or time-consuming. Your tenant may want to pay their rent but then wait to do it when they have more time to write a check or get you the cash. Paying you should be as easy as tapping a few buttons on their phone or computer.
- Use Online Rent Collection: With Burbz, you can have your tenants pay online via ACH, credit, or debit. We also offer a roommate split feature so all tenants can pay their fair share.
- Reminders and AutoPay: Prompting your tenants to pay on time with email or text reminders will make it easier for you to collect rent. Your tenants can also use our software to pay their rent each month automatically.
- Track Cash Payments: If your tenant pays via cash, be sure to document everything. Have the tenant sign a receipt to certify that the rent was paid on time. This will help protect you and the tenant from any errors or legal issues.
Try Burbz Now
If you are a landlord and want a modern way to manage your rental properties, check out Burbz and see everything we have to offer. Our software and marketplace will help reduce your workload and improve the rental experience for all involved parties.