Top Ways Rental Property Owners can Prevent Late Payments from Tenants

resident holding late payment sign

As a rental property owner, you will have to collect the rent payments from your tenants every month. Even though it may seem like an easy process, sometimes the owner has no control over when their tenants decide to pay their rents.  While a single late payment does not do much harm, a string of late payments can cause problems for the rental owner. If you start to allow the tenants to make payments a day or two after it is due, there will come a time when these days will turn into weeks. No matter how friendly you are with your tenants, you need to treat your operation as a business, and late payments should not be tolerated.

Irrespective of the reasons that renters provide for late payments, it is essential for owners not to be passive and ensure that tenants pay their rent on time. Here are some of the ways you can prevent late payments from your tenants –

 

Implement a Payment Reminder System

To remind your tenants of the payment due date, you can create a system that sends them a message on their phones or a mail a few days before the payment is due. There are many online tools that you can use to create a reminder system. As a rule, you should remind them at least three days before the payment is due and then a day after the due date saying that they are now late, in case the payment has not been made on time.

 

Clear Communication with Habitual Late Payers

If any of your tenants are routinely paying rent late, it is best to talk to them directly in person. By speaking in person, you should be able to find out if there is a genuine reason for the tenant that is preventing him or her from paying the rent on time. It might happen that they are not receiving their salary or check from child support system before the payment is due. In these circumstances, you can choose to change the due date for the tenant.

 

Implement Late Fees

Property owners are free to enforce late fees for tenants who do not pay their rent on time. By collecting late payment fees, you would be surprised how tenants start to pay their rent on time without any problem. But, when implementing late fees, it is essential that the late fee policy is fair and consistent. Allow for a grace period after the due date to the tenant to allow them to pay their rent. It is also essential that you preserve all communications regarding late fees with your tenants.

 

Enable Electronic Payments

Many property owners use an electronic payment system that allows their tenants to pay the rent online and not in cash or through cheque. Since everyone is busy, it becomes a big hassle for the tenants as well as the property owner to physically collect the rent. To get payments on time, enabling an electronic system of payment can go a long way for receiving payments on time. Online payments allow owners to document and track all payments much easier than collecting them in person.

 

Screen Tenants Carefully

One of the ways to avoid late payments is by screening your prospective tenants carefully and picking the one with a good record. Even though one or two cases of residents paying late can be ignored, but if you have more such tenants who always pay rent late, there might be a need to change your screening process. Before giving out your property for rent, it is essential that you speak to the previous landlords of the prospective tenants and confirm their employment. Check the income of the tenants and have a minimum income guideline to avoid late payments. By choosing high-quality tenants, you can ensure that you are receiving your rent on time.   

While many property owners might feel that the only way to prevent late payments by tenants is by evicting them, it is not always so. Eviction should be last option for property owners as it takes time and effort. If you do not have enough time to collect payments on your own, it is best to hire a property manager who can help implement a stable payment system so that the tenants do not miss any payment date. Property managers can also ensure that you do not have to worry about tracking down the late payments from tenants or have to handle any evictions on your own.