What are your best practices on collecting rent?

Question

Hey guys! My biggest concern is late paying renters. What are some good practices or policies that you use? Thanks very much!

Michael Plante · Answer

3 day notice

7 day notice evict

Mary Smith · Answer

@Steve Hammer I collect rent from my tenants using a PM software. Since my late fees are automatically added to their invoices (I have a recurring late fee set up), most of them pay on time to avoid high late charges.

Joe Martella · Answer

$10 per day.  Nice.  I have $50 after the 10th.  Some would say that is too generous and I should only give them 5 days to pay.

I am not as big as you.  I only have 3 SFH as rentals.  Working on getting number 4. I have one family that is late more than anything but they are very nice people.  Again, the tenants have the upper hand right now, so kid glove approach and I hope that buys me some emotional capital so they continue to pay.  There are some horror stories

Joe Martella · Answer

If your biggest concern right now is late payers consider yourself very lucky.  Some tenants out there haven’t been paying their rent for over year with no end in sight.

If the late fee doesn’t scare then just get additional income.

Matt Ziegler · Answer

We used to collect via the mail... with an early pay discount, if paid by the 5th. We built that into the leases.

This meant time spent checking to P.O. Box and going to the bank.

We switched to using apartments.com now they pay via the app. Late fee is automatically added after the 5th. This has been very helpful.

Quick communication if not in the system on time, and less time spent with rent collection

I was hesitant at first, but this has been a win.

Good luck on the journey

Luciano A. · Answer

We use our property software to allow tenants to pay by logging into their portal to set up an auto draft or one-time payment as well as sending money into our business account using Zelle or going into the bank and depositing their rent into our account using provided deposit slips so we can know who paid what.

The key is to be firm on your late fee policy. One $50 late fee after the 3rd is a quick way for a tenant to not be late again. This is especially true when your tenant moves in. The first late fee we waive but we send a kind reminder that if they pay late again they will incur a late fee.

Patrick Page · Answer

I find that ACH payments are the easiest and most effective ways to collect rent. The software we use allows our tenants to set up automatic payments so they do not miss the rent due dates. We will also accept checks including cashier checks as forms of payment. It is also important to put in the lease that if rent is not paid by a certain date in the calendar month it will be considered late and subject to a late fee. The more impactful you make the fee the more likely someone will pay on time to avoid having to pay more. You can make the late fee a flat dollar amount or % of the balance due. We give our tenants until the 5th of the month to pay. If we do not receive payment after that time an automatic late fee is applied to their total balance due.

John Teachout · Answer

The key to having rentals is to get the rent paid in a timely manner. We try to accommodate the tenants by making paying the rent convenient. Most of our tenants pay rent directly into our rental bank account. They can deposit checks, cash, whatever. Some pay via Venmo (we never suggest this but will accept it if that's what they want to do) We've even opened a bank account specifically for a tenant to deposit into as there wasn't a branch of our bank in their town. We just received a money order in the mail today from one tenant. To us, how we get it is less important than that we get it.

Tom Harkins · Answer

@Steve Hammer I prefer the carrot to the stick. A small rent discount for tenants to set up auto ACH payment on the 1st of the month.

Peter M. · Answer

@Steve Hammer $50 late fee then 10/day after. No grace period anymore. Give them lots of ways to pay, paypal, zillow, cozy, venmo, deposit slips, mail to PO box

What are your best practices on collecting rent?

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