Gentle Reminder Letters to Tenants

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I have 3 sets of tenants who all pay on time, but always need a reminder. All are busy professionals who travel and pay, and always by the 5th, never late. Anyone have a letter or idea to send on 4th as a gentle reminder?

Kevin Polite, HausZwei Homes | http://www.HausZweiHomes.com | GA Agent # 269676

Could you set them up on online auto-payment of rent?

I know that's not what you're asking,... I'm not sure of the best gentle reminder letter. I'm sure someone else will post one.

Usually a quick call or text works, even an email. I don't send letters for reminders because they don't all open mail right away. I usually call or email on the third.

I text them on the last day of the month or the first, depending on when I think about it. I just say ", this is Jon. Just a reminder that rent needs to be deposited by 9:00 PM on , 1 for the discount. Total amount due is " I give a small discount if rent is paid by the first. The official amount is due by the fourth. So, they would get a different text on the 2nd, then again on the 4th if its not paid. On the 5th, they get a note on the door. That one says "pay or quit." Often rent is in before I think about texting, and they usually (not always) text me when they make the deposit. If I had a lot of tenants, I would use one of the automated texting services.

Yes, I do realize there's some risk associated with them making deposits, but it works well for everyone involved. They only earn this privilege after proving they will take care of the place and pay on time for a few months after moving in.

Jon Holdman, Flying Phoenix LLC

Since we converted our tenants to bank deposit, we send a pre-filled deposit slip with a pre-typed note reminding them that the pre-filled deposit slip is a courtesy. Works great. I usually mail it out around the 20th.

So essentially your primary job is not a real estate investor, it is rent stalker. My gentle reminder is a 3 day notice to pay or quit. Either they get with the program or they don't and find another place to live. As my good friend and fellow investor says "just don't park your car with the oil leak in the driveway."

I don't understand why people coddle their tenants. The tenant's job is to pay rent on time and keep the place clean. After the first 3 day, they'll straighten out. If not, send them a letter and let them know you're increasing their late fee. I like to start at $100. If they are continually late, send them another letter and raise it up higher. You can even do a daily rate if allowable in your state.

Just for the record, I have one tenant who has been in one of my buildings almost 20 years, another tenant in a different bldg just hit 18, and his next door neighbor is at 15 years, and I just sent them all letters raising their rent like I do every January. Out of 45 doors, I have 1 vacancy and that is because I just purchased the property and finished rehabbing it.

I don't make friends with my tenants. I try not to ever talk to them. I am more than pleasant when I have to have a conversation with them, but I'm not here to buddy up with them and be all chummy sending them pleasant reminders. I just want the rent deposited into my account on the 1st of each month and for them to not bother me. I tell them all at the lease up that my goal is that they never see me again until the pre-move out inspection or at eviction court. Trust me, they don't want to see you either. A tenant's perfect world is to never have to deal with the landlord.

Aaron Mazzrillo, Advanced Home Sales, Inc. | http://www.aaronthehousebuyer.com

I text "status of the rent?"

If they don't respond I know I may have a problem and call, or have my bookkeeper call. Quit notice on the 6th.

Jon Klaus, SellPropertyFast | [email protected] | 214‑929‑6545

Aarpn, good thought, but they have never been late, just a reminder to pay snf to date they always have. I have in sll of my leases a late fee for the 6th and builds daily, but havent had to use that, but once when one aid on the 6th

Kevin Polite, HausZwei Homes | http://www.HausZweiHomes.com | GA Agent # 269676

@Aaron Mazzrillo , all good in theory, but almost everyone who wants money from me periodically sends me a notice - mortgages, utilities, dentist, etc. I don't see reminding tenants as any different. Between the small discount and the reminders, I get to the end of almost every 1st with all the rents in the bank. To me, that's worth sending a few texts.

And, yes, IMHO, if you're going to self manage, stalking the rents and talking to tenants comes with the job. If you want to avoid that, hire a PM. But when I compare the work the PM does for me vs. the cost, I make something like $50 or more an hour to deal with the tenants.

Jon Holdman, Flying Phoenix LLC

I would do what Aaron recommends and just serve the three day notice one time to get their attention.

Does your grace period end at COB on the 5th? If so I don't see how you can demand that they pay earlier. Eliminate the grace period (unless your state/city requires it) from future leases if you need the rent earlier.

I sent text and called, got responses from all within an 1 hour. 2 will be deposited by Noon and the other later today. I'm a pretty judge of character and I do thorough background/credit check and all these have been good tenants, but all are travel extensively. Haven't had to do a late fee, but once and that was for 1 day.

Kevin Polite, HausZwei Homes | http://www.HausZweiHomes.com | GA Agent # 269676

Originally posted by Kevin Polite:
I sent text and called, got responses from all within an 1 hour. 2 will be deposited by Noon and the other later today. I'm a pretty judge of character and I do thorough background/credit check and all these have been good tenants, but all are travel extensively. Haven't had to do a late fee, but once and that was for 1 day.

If these people all have good jobs I would assume they have some savings and it would be no big deal for them to mail it earlier, perhaps even much earlier like 10 days before the first of the month. If they are travelling a lot then they should be aware that they need to allow for extra time for the rent to arrive in your hands. It sounds like these people are either extremely disorganized or they know they can get away with this.

@Jon Holdman What are the risks of having them make deposits?
Honestly trying to think of some and not coming up with any.
As you said it is convient for everyone, especially you. Seems far more secure than taking cash, checks or even certified funds.
It gives a far better record than any of the above if they claim they paid and didn't and the same in reverse if you said they didn't and they did.

I am trying to get all new tenants on a depsit system and then convert existing ones so I honestly want to know what down sides I am missing.

Medium rre logo web rgb w motoShaun Reilly MBA, Reilly Real Estate, LLC | [email protected] | 1‑800‑774‑0737 | http://www.MassHomeSale.com | MA Agent # 9517670

There are some other posts on the risks of letting tenants do deposits. There are a couple, I see. One is that the tenant can make a deposit, even if you don't want them too. E.G., you've terminated the lease and they make a deposit. Another is they make a partial deposit to stall an eviction for non-payment. Another is there is an issue with their deposit. One of my tenants deposits her paycheck into my account. So far no problem. But I could see the paycheck bouncing, a problem my daughter once had with one of her jobs.

Jon Holdman, Flying Phoenix LLC

Thank you @Jon Holdman for the insight.
I don't have any solutions for the bad deposit situation.
For the others you could terminate the account prior to giving them notice.

The system I would be setting up would have my main account with nested subaccounts for each unit, so this should not be difficult.
Though I might not have thought to do it before!

Medium rre logo web rgb w motoShaun Reilly MBA, Reilly Real Estate, LLC | [email protected] | 1‑800‑774‑0737 | http://www.MassHomeSale.com | MA Agent # 9517670

One thing that I've encouraged my tenants who have checking accounts to do is set me up on the auto pay. I pay all of my bills with online banking. It's fast, easy, and I don't have to pay for a stamp.

I let them know that since their rent is the same every month, they can set me up in their online banking to get paid every month before the first.

If a quick text works for you then all the best. It really depends on what works for you and your tenants. For me a quick call on the 3rd usually takes care of it. If not a letter goes out to indicate late rent and late fee usually in their mailbox by the 5th. By the 10th a notice to quit gets started. Its not so black and white. I tell my tenants to please communicate any issue right away. It required a little education up front but worth any sleepless night. Tenant if late they will call me and we can easily remedy the situation. I reinforce to them the importance of communication and they understand. Only takes a few of these moments and all is good to go. If not then you already know that this tenant is not one you will want long term and definitely need to be on top of.

I implemented these options last fall. Not enough experience to write an opinion. So far out of 12 units, 1 performed the direct deposit using deposit slip, 1 sent through Bank Bill pay.

Pay your rent in 3 easy options:

1) Mail a Check – Current process today. Mails to a PO Box.

2) Bank Direct Deposit - Instant payment of rent performed at the bank or electronically through your online bank account. I provide the Deposit Slip pre-filled as a courtesy.

3) Bank Bill Pay – Allow 5-7 days for payment of rent performed electronically through your online bank account.