It's always extremely helpful to hear other people's ideas / experiences on the best way to have as close to 100% collections as possible. Does anyone have any interesting methods they use that has worked for them?
1st send out rent reminders on the 27th rent is due on the 1st.
2nd late rent notice delivered on the 2nd if not paid, with late fee amount included.
3rd pay or quit on the 3rd,, (check state law)
file by the 10th if no payment.
Or knock alot,,,
@Deanna McCormick , have you found this is the best possible way?
Actually , I just reviewed your profile,, it says you have 2000 units..
Put your office staff at your sites, to work,, yes,, I' ve managed some pretty large complexes,, we would post rent reminders at mail boxes 5 days before the 1st.. rent is due reminder.
And we would drop off at each unit under the door late rent notices on the 2nd,,, you owe now an additional 50$ late fee so pay the entire amount..
We Would TAPE on Door a RED paper notice on the 3rd the,,Pay or QUIT that usually always made them pay.. they didn't like the red notes,,
This will make your office staff :: not happy to do the extra leg work delivering these notices but you'll get your money..
WE always filed on the 10th,, but did a well check, peek inside unit first to know if they were still occupying it incase they just skipped,,
I have found that strict adherence to time frames, as Deanna suggests, is the absolute best method to train tenants to constantly pay on time.
Never wait even a extra day. I give notice on the day after rent is due and follow through the process without exception. If you have a large building word gets around that you are fining and evicting tenants for late/non payment.
Make an example of one or two tenants and the rest toe the line. No pay No stay. If a tenant does not get the message and continues to pay late a second and third time they are the one I make an example of. I get rid of them.
If your state allows a significant amount of a fine for late payment it is helpful however if the fines are not significant you will need to evict a couple of tenants to make your point.
Landlords with a significant number of doors inevitably have a few tenants randomly pay late. Small landlords that have tenants regularly pay late have trained them that it is ok. With small landlords the problem is not the tenant the problem is a incompetent and lazy landlord.
@Troy Green as long as tenant had their portion in on time we did not charge late fee. Soc Security pays on the 3rd.. that can be tricky.. we worked with some so to avoid late fee or we'd reverse late fee if paid on 4th. but they needed to make us aware of that so we could accommodate that issue
Sect 8 payment sometimes wouldn't come in till the 3 or 4th. but tenant had to have their portion in on the 1st. No late fee on that.
It was always amazing how many rent checks came in after I closed the office on the 1st,, but as long as I had the check in the drop box when I opened up morning of the 2nd we didn't charge a late fee.. My biggest headaches was when rent was due on a Saturday,, so by Monday was already the 3rd.. those months were always a scramble..
One thing my mentor does is give a $1 lottery ticket to each of his tenants that are current and on time with their rent each and every month. The perceived value to the tenant is greater than $1 and the value to the owner/investor is certainly much higher than the cost of providing the lottery ticket to each tenant.
@Rob Beardsley That is such a creative idea and I could see that working well in lower rent areas! I'm going to try it out in the future...such a great incentive that could appeal to class C and D renters.
@Stephanie D. I agree! I think it would work well in that demographic. Good luck!
@Rob Beardsley , did he do it for everyone or only the first 50 or something like that? Also, did he have any people who the state paid for all of their rent?
@Troy Green He did it for all of the residents who were up to date and on time in that building. I don't believe any tenants were on subsidized living.
@Rob Beardsley , I love the idea but we have 2,000 units. I think I'll test it at one building and see how it goes. Trying to figure out how to handle full subsidies though. Maybe you only qualify if you pay your rent not the state?
@Troy Green that could be a good tactic/stipulation. Another idea would be to host a drawing/party. Those who are in good standing get their names entered into a raffle in a common area with all people in good standing for a quick get-together.
I do not see any advantage in rewarding people for doing something they are required to do according to their lease. Rent payment on time is a standard requirement in all states.
IT would be like giving a employee a bonus for showing up for work on time. Not logical. You fire them for being late not reward them for doing what is expected.
There is a legal process to follow to deal with and train tenants to pay on time. Getting creative is simply creating more work for a landlord as opposed to fixing the problem.
If you want to appear to reward tenants for on time payment raise the rent above market and give a discount for paying on time. If they pay late you punish them for 6 months with the higher rent fee.
For this to work rents need to be kept at market.
@Thomas S. , it is considerably more efficient to keep a paying tenant than it is to go get a new tenant. In this case, if I could spend $1 to get tenants more likely to pay (especially on time) it makes unbelievable fiscal sense.
At my company, I do pay employees bonuses for things that they are "supposed" to do. An example of this would be paying bonuses for keeping the property under 5% vacancy.
@Rob Beardsley , I like that idea too. It gets a sense of community within the buildings and is fun for everyone.
@Troy Green I agree! One of my long term goals is to own a luxury building in a major city and have numerous initiatives to install a strong sense of community in a young professional and hip environment.
@Rob Beardsley , great goal! I just found out that the raffle idea is considered illegal in NYS. Shoot!
@Troy Green Thats terrible! What is allowed to do that is similar?
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