• August 25th, 2016 - 
  • Posted by gordonw_CLD

Collecting Rent on Time

For many landlords, rent from their properties will be their main source of income. It is therefore crucial that they receive rent from their tenants on time each month.

If you’re a landlord, you may believe that this is out of your control; however there are a number of steps that you can take to help maximise the chances of being paid on time each and every month.

Choose your Tenants Carefully

First of all, take care when choosing your tenants. Only rent properties to tenants who can provide references from previous landlords – and make sure you check these to ensure that they have a history of paying on time.

Request Payment by Direct Debit

One of the easiest ways to ensure your tenants will pay their rent on time is by asking them to set up a monthly direct debit. This will help eliminate human error and tenants “forgetting” to pay on time.

Of course, it is still possible that your tenant may not have enough money in their bank account to pay. However, if this does happen, you will have a legitimate reason to contact them directly.

Property maintenance software can help you keep track of your monthly rental payments, making it easier to manage and chase up any missed payments.

Communication

Clear communication can make all the difference when it comes to your tenant’s monthly rent payments.

This applies to both the wording in the contract and any verbal communication you have with your tenants.

In your tenancy agreement, you should clearly set out the following:

  • The exact amount due every month
  • Rent due date
  • Accepted payment methods
  • Any grace periods
  • Terms including defaulted payments

Is there a valid reason?

There could be a valid reason as to why your tenants aren’t paying on time. For example, the payment date may not be convenient. If this falls just before they receive their monthly salary, they find themselves stretched at the end of the month.

This can be easily resolved by simply discussing an alternative payment date that will work for both you are your tenant.

Late Fee

Introducing a late fee can help to get your tenants to pay on time. This is normally a small percentage of the rent added on to the monthly payment.
Do keep in mind that you cannot agree a late fee verbally, and will need to include this in your contract. It is obviously easier to do this at the beginning of the lease, rather than having to revise the contract during the tenancy.

Offer A Discount

Everybody loves a good discount and will jump on any chance to save some money. If you want to give your tenant an incentive to pay their rent on time, a discount could be something to consider.

Further Action

If your tenants repeatedly break the terms of the lease with late payments, you may decide to start formal proceedings.

If the tenancy is an AST (assured short hold tenancy), you will need to give them a section 8 notice of seeking possession, outlining the terms that have been broken.

Always ensure that you follow correct procedures to avoid being charged with harassment of for illegally evicting your tenants.

If you are managing multiple properties at the same time, property maintenance software and maintenance management software can help lighten the load. Contact GNB today, to find out how we help landlords keep up-to-date with maintenance, finances and more.

Posted in : Property Management

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