How To Collect Rent Early and Improve ROI
by Brian Davis
Can you imagine tenants consistently paying on time or possibly even early? Amazing concept, isn’t it. While many tenants initially perform well, over time many become lackadaisical with their rental payments, and their adherence to the rental agreement. Try out these five great tips that will help ensure your tenants (and your rental investments)stay in great condition.
5 Landlord Tips For Collecting Rent
Tip 1: Bonus Offer for Early Rental Payments
Who doesn’t love a bargain, or a great sale? Offering an incentive for advance rental payments will encourage your tenants to pay their rent early. It could be a $50 break on rent, a discount on the following month’s rent, a credit towards their utility bill, or a gift
card to Best Buy! Incentives are the way to go and more often than not ensure landlords receive timely payments.
Tip 2: Late Payment Penalties
Positive reinforcement works, right? Well, so does negative reinforcement! We strongly encourage your rental agreement to include a late payment penalty. Still, the ultimate responsibility for enforcing timely payments is up to you.
Filing for eviction over a $40 late fee may seem extreme, but it will send a strong message, and you probably will not have the same problem again.
Tip 3: Report Rental Payments to the Credit Bureaus
Credit is critically important in today’s society, and many tenants appreciate this, going to great lengths to protect their credit ratings. People are far more likely to pay bills on time when they know the payments are being reported to credit bureaus, so give your tenants a strong incentive to actually make those payments on time, or even early.
Tip 4: Don’t Accept Rental Agreement Violations
Being a landlord is being in business, and businesses do not simply allow their clients to break their contracts. For example, if your lease prohibits tenants from keeping pets, but you discover the tenant has a mastiff dog – it’s time for a swift and effective intervention.
If you send your tenant a notice informing them that they must cure or vacate, followed by an eviction complaint, you put yourself in an excellent negotiating position. From there, you may decide to let them keep the pet, but only if they pay an additional monthly fee, or put down an additional deposit, etc. However, it’s critical that you send an unambiguous message that you will not tolerate any violation of your rental agreement.
Tip 5: Rental Inspections Are Essential
We suggest checking on your rental properties as often as you can, keeping an eye on how your tenants are treating your investment and verifying there are no rental violations. Once again, this sends a message that you are a serious landlord, and that the rental property is a priority for you. This may also encourage your tenants to keep the property clean.
If you want your tenants to perform and your rental property to yield the maximum possible return, you must be aggressive in managing that investment: be proactive, be responsive, and above all, enforce the rules of your rental agreement!