5 Strategies To Get Early And On-Time Rent Payments

by | BiggerPockets.com

A common problem for landlords is collecting on-time rent payments.  Personally, I don’t mind late payments because I enjoy making the extra $50-100 per month but generally speaking you want to ensure timely payments if you can.  A couple weeks ago I had lunch with a friend and she shared some of the strategies that her landlord friend uses with her tenants.  I thought they were excellent ideas and sought out additional strategies to share with all of you.

All of these strategies focus on rewards to induce positive behavior which is uncommon because most landlords just focus on the punishment for negative behaviors (e.g. lack of payment or late payment).

Strategy #1:  Higher rent with monthly discount for on-time payment

For example, you can structure your lease agreement so that the rent payment is $25-50 higher than what you really want, but then provide a $25-50 discount when payments are made on or before the 1st of the month.

Strategy #2: Instead of raising rents each year, lower rents!

Let tenants know that while most landlords increase rents year after year, you will provide a reward and lower the rent by X amount of dollars for the next lease period if all the rent payments were early or on time.

Strategy #3: Provide discounts for tenants who will sign up for automatic debit

This isn’t an option for everyone, but getting a tenant on automatic debit payments will be very useful for getting your payments on time.  Make it an attractive option by offering a $25-50/month discount on the rent if he or she signs up for automatic debit.

Strategy #4: Report payments to the credit bureau to help build tenant credit (and deter late payments).

There are numerous services available that help landlords and tenants report payments to the credit bureaus.  Most tenants will want to build good credit, so they will be more likely to make timely payments.

Strategy #5: Give a bonus during the time its appreciated the most — the holidays!

You can structure this any way you want, but one idea is to offer to put $10 in an account for each month the rent is paid on or before the 1st of the month and then match it dollar for dollar and send a holiday bonus check the first week of December.  For example, if the tenant makes 5 early payments, the first week of December you will cut them a bonus check (or give them a gift card for like a Wal-Mart or Target) for $100.

These are just a few ideas on how you can provide incentives to tenants to pay timely rents.  Landlords, what other creative ideas have you had success with?

About Author

Shae Bynes is a real estate investor in Sunny South Florida. On her blog, GoodFaithInvesting.com, she provides helpful tips and an inside look at her real estate investing adventures -- obstacles, failures, & successes!


  1. Oh man, we have tenants that are a pain when it comes to payment deadlines. We understand that times are hard, but the crux is, our rent is so much lower than most, but they still pay way later than the intended time. Anyways, these sound like great ideas, we might try this out, and hopefully it works.

    • Ria, I hear you! I have one particular one who is almost always late, but you know what? She tells me she’s going to be late, how late she is going to be, and has already calculated the late payment. In those instances, it doesn’t bother me so much as long as the communication is there.

  2. Great ideas, Shae! In my landlording days, I never used much incentives to entice tenants to pay early but know of others who have (more larger scale operations). I notice a lot of lower end parks now doing these types of programs to entice their tenants in an effort to make the park a better place to live. Though, there are mixed results.

    With the economy the way it is, I think these ideas can only help. And, rewarding those for good behavior is a great idea because it can help to change the mindset of tenants to be more positive.

    Thanks for sharing Shae! 🙂

  3. Hi Shae,

    I have always used a version of what you have listed as Strategy Number 5.

    I have always been indirect with my tenants with my desire to have them pay on time, and it has worked well over the past 5 years.

    I try to always provide tenants when they first move in with a welcome gift. Usually a nice gift basket. At Christmas/Holiday time, I send them a nice basket as well, or sometimes a gift certificate, and then at the ‘anniversary’ date of when they moved into the house, I send them something as well.

    This has always seemed to work in creating a certain level of respect. For the most part, I become respected, tenants appreciate my good gesture, and they are mindful of always trying to pay on time.

    Best Regards,

  4. Hi Shae,

    These seem to be great tips, a few of which I have been thinking of implementing.
    I am curious, though, how tip #2 works? It seems contradictory to the longterm goal of increasing cashflow. If you offer the tenant a $15 discount on a renewed lease if they pay on time every month then what happens 4 years later when your rent has now gone down $60?
    Do most of your tenents that this has been offered to fail to meet the qualifications, are most of short term?
    Am I not understanding something?


  5. I have some tenants who are very good about paying on time, and structuring it as a discount definitely works. Others are always waiting until their paycheck arrives after the first of the month and using their entire paycheck to pay rent. I have told one tenant numerous times to save $200 out of each paycheck BEFORE the 1st of the month, set it aside, DON’T touch it, and by the time the 1st rolls around, you will have your $800 rent. Since they are in the habit of always paying late, they can never seem to budget their money ahead of time. It seems so logical, but I can’t get it through their heads that the most important bill should be for the roof over your family’s head, not for going out to dinner, etc. I guess some people in the world will just never be good at budgeting their money. I have even offered this person to pay weekly if that would help, even though it would be inconvenient for me, but it never happens. They think I am unreasonable to expect them to budget their money.

  6. Hi all. I have always paid my rent at least a week early. And sometimes I pay 2-3 mos ahead and then continue to pay early. I’m curios as to what a Landlord thinks when they get my rent (on avg.) at least 2 weeks early. Usually I’m 3 weeks early which eventually sets me up to pay (for example) April rent by March 10 and then May rent by march 25th. My rent is due on the 1st BTW. Thanks.

  7. I like a lot of these ideas Of course you cant do them all at the same time.
    and different tenants will respond to different motivations

    I think the discount has the biggest chance of success

    and the one where the rent goes down at the next lease signing
    I would make an adjustment
    to it though
    I would say you have to have at least 11 payments on time for the year
    this way if they mess up on a month they won’t feel like there is no point in trying to be on time if they already missed the perfect score.

    geat post

  8. Offering incentives to drive the right behaviours is definitely very effective. If we do want to have rent received on-time, it definitely helps to entice the tenants by offering a form of reward. Giving them a form of discount for signing up for automatics debit or charge to credit card definitely works.

  9. Reuben Rosofsky on

    hi everybody, these are all great ideas. I am new to the business, but only five units SFH . And learning. Everyday one of things I started immediately is automatic debt payment this is great for me because I am handicapped. And do not drive pain to get to the bank. One of the ways I sell this idea is with my resident retention program if their rent on time for 12 months and sign a new lease, they get a list of gifts to choose from and by being on the automatic that payment, they will never be late seems to be working I also offer biweekly rent payments and this is a moneymaker. This can help a lot of residents, who have a hard time managing their money. instead of 12 payments you receive 26th payments a year, you basically get an extra months rent and I tell them this up front. They don’t mind the extra costs for the convenience. Right now I have two out of five residents on biweekly. This is no different than the credit card company charging interest for the convenience of using a money today paying for it in the future.

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