Billing your Tenants for Rent
Billing Your Tenants for Rent
RENTS DUE ON THE FIRST OF EVERY MONTH!
It took about a year for me to develop a plan. Tenants were paying their rent any time they wanted to during the rental month. Since I handled my own court cases and owned a lot of properties, I spent a lot of wasted time, typing up the Quits, the Summons and Complaints, to only have the tenants pay their rent just under the wire.
My husband would always say, well just think of it this way, we’re getting extra income. ($25.00 for late fees every month) and true we were, but I also worked on the houses, fixing them up, painting garages, handling court cases, solving tenant problems and more. And it just wasn’t worth it to me to go through all that work, worrying about whether or not a tenant would pay, whether I’d have to go to court, and if so, a lot of time preparing my case, (making copies of all their leases etc) to have them pay after I’ve typed everything up. Plus I didn’t want to be in court every single day of the month. Gosh, somewhere along the way, I needed a life!
So I made all rents due on the 1st of every month, and I would pro-rates rents in order to get all of them due on the 1st of every month. My lease agreement stated that if rent was not received in my office on or before the 1st of the month, then their rent was late and they would receive a Notice to Quit for non-payment of rent. And if rent was not received in my office on or before the 5th of the month, they would receive a late fee bill for $25.00.
So I set up QuickBooks® to automatically bill my tenants for rent that is due, 10 days before their rent was due. (I figured if my vendors send me a bill 10 days before the bill is due, then why can’t I treat rent as a bill and send it to my tenants 10 days before their rent was due). So I tried it. And, low and behold, the next month mostly all my tenant's rents were received in my office on or before the 1st.
You see I chose tenants who paid their bills on time when I qualified them for my rentals. And because most landlords haven’t done anything about rent coming in late, tenants just accepted that as being normal, not realizing that paying rent anytime during a rental month was not okay, therefore, they didn’t view the rental contract as a legal contract that actually had a due date! So when they received the bill in the mail for rent that is due, and it clearly said so on the Invoice that it was a bill, the tenants viewed it as a bill and rents came in and on time.
The few tenants who didn’t pay on or before the first and received the Notice to Quit the next day, (the 2nd of the month) would call my office and rant and rave about it. And, I would just tell them, to not worry about the Notice, it’s just to let them know that I haven’t received their rent yet. And, that it doesn’t become a legal document unless they don’t pay their rent which definitely had to be in my office on or before the 9th of the month or on the 10th I would have to file the Notice to Quit in a court of law.
I told them that in actuality it helps them to see that if they did pay their rent, that I haven’t received it yet and gives us time to find out what happened to their money. If they said they mailed it, I would ask for them to send me a copy of the check or money order.
Those tenants that got tired of receiving a Notice to Quit on the 2nd of the month, began paying their rent before the 1st because they didn’t want to receive that dastardly Notice to Quit. Therefore, it was a win-win situation. And I lived happily ever after.
Just a little tip.
Nancy Neville