Basics of Property Management: Screening Potential Tenants
Tips To Help Landlords Control And Reduce Late Payments From Tenants
Jesse Obrien
The money you receive from your tenants for their rental payments is the money your business has to operate on, and this is why it is vital for you to do all you can to make sure you receive rental income on time every month from every tenant. The problem is, how do you do this? Here are some tips that may help you learn better techniques to control and reduce late payments from the people you rent to.
Create a Good System
First off, you will need a good system in place if you want to receive on-time payments from your tenants. This system should offer multiple options for paying rent and late fees for paying rent late. You should also have a system in place for handling evictions.
Enforce the System from Day One
The system you put in place is only as good as the way you enforce it, so you will need to make sure you enforce it from the start. If a new tenant pays rent a day late, enforce the late fee for the tenant. By doing this, it may discourage them from paying rent late again in the future. If a tenant falls too far behind and your system states that you will start the eviction's process at this point, start it. Enforcing the system you have in place is vital if you want your tenants to pay on time.
Offer Incentives for On-Time Payments
It may also be a good idea to set up incentives for on-time payments. One idea is to offer a $10 or $20 discount each month to tenants that pay their rent a few days early. A lot of people may take advantage of this to receive the discount each month. You could also offer an annual incentive for tenants who pay on time all year. For example, you could give each tenant a $100 gift card at the end of the year for those who followed through with paying on time every month.
Choose Better Tenants
The last thing to understand is that good tenants will pay on time. Therefore, you may need to focus more attention on finding good tenants to begin with, as this will help you achieve your goal.
Collecting the money your tenants owe you for their rent is vital for your business. If you are having trouble with this issue, talk to a property management firm to see if they can help you improve this part of your business.
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For the last several years, I've used a property management firm to help with my rental properties. One of the tasks that they handle for me is screening applicants who would like to move into one of my vacant units. Their expertise has helped me lower my tenant turnover and find people who want to stay with me for years. Part of the process is a tenant screening credit check. Before any further contact takes place, my manager orders credit reports from at least two agencies. That is enough to tell us if an applicant is a good financial risk. Assuming the references work out, I meet the candidate and make the final decision. If you own rental properties, let me tell you more about the benefits of having a property manager. I'm betting you'll find this type of arrangement will work for you too.