If you were to draw up a list of expenses a rental property incurs, you’d have a padded outline of bills like utilities, taxes, maintenance, and repairs. But while your property may have plenty of needs, your rental income is often the only incoming fund you can depend on. Thus, it can get tricky to pay your other bills when your renters refuse to pay or are consistently late with their payments.
Are you looking for tried and tested ways to earn rental income when you should? Do you want to deal with fewer defaulters? This article explores the best ways to encourage tenants to pay rent on time. Let’s get started.
How to Encourage Tenants to Pay Rent On-Time
Outline Payment Timelines and Procedures
Sometimes tenants delay paying rent because they need clarification on the proper steps. It’s easy to assume that you’ve laid down a straightforward guide during a brief meeting where you handed them their keys amidst moving boxes. But it would be best to have a proper sit down to outline your payment timelines and acceptable methods. You can also print out a copy they can refer to later or send them a digital file. This step will be an excellent reminder for new tenants and keep the money rolling.’
Boost the Convenience
Another way to encourage tenants to pay early is to make it easier for them. It’s 2023; there’s no reason to insist your renters always pay in cash. You would make life more convenient for everyone if you were open to other forms of payment like a check, credit card, PayPal, or other digital transaction platforms. Besides making it convenient for tenants to pay you using their mobile phones, there are other benefits to going cashless. Digital payments make tracking your rental payments much more straightforward and can help you balance your books better.
Add an Incentive
As the famous saying goes, “you’ll catch more bees with honey than vinegar.” Paying your rent or any bill can be a stressful and unpleasant experience. Instead of becoming one more tedious chore your tenants have to deal with, you can make the circumstances much less stressful by adding an incentive. For example, you can give a $20 discount to renters who pay on time or offer another type of reward. If your motivation is memorable and exciting enough, it could help you earn cash quicker to offset your bills. Bay Property Management Group Baltimore can help remind tenants about upcoming rent payments.
Include Consequences for Late Payment
Unfortunately, incentives aren’t always enough to encourage timely payments. In such a scenario, it would be best to implement consequences for late rent. For example, you could add a clause to your lease that imposes a fine on defaulting tenants to ensure everyone is aware before the due date.
Hire a Property Manager
If you’re a busy or long-distance landlord, you might need help with late payment because your hands are too full, and it’s inconvenient to serve a physical reminder. In that case, let a professional handle it for you. One of the essential duties of a property manager is rent collection. Hiring a local expert to handle this task can ensure timely rent payments without hassle.
3 Tips for Writing an Effective Payment Reminder
Use a Clear Subject Title
If your tenant’s rent is past due and you need to send them a payment reminder, you should clearly outline the subject matter. Whether it’s an email or handwritten notice, go straight to the point with a professional and non-threatening subject line. “Late rent notice” and “Payment Reminder” are great examples you can use.
Reiterate Payment Terms and Methods
Reiterate your payment terms and methods in your letter after informing your renter about their past due bill. Reminding them of proper procedures can inspire the right action. Also, get familiar with the best and worst rental payment methods to ensure you’ve chosen a convenient option.
Attach an Invoice
Finally, attach an invoice to your letter to let your tenant know precisely how much they owe, especially if they default by more than one month. This action can ensure communication and expectations are met down the road.
Conclusion
All tenants have a legal obligation to pay their rent on time, and as a landlord, you’re within your rights to start an eviction procedure or take missed rent out a defaulting tenant’s security deposit. However, these solutions are often a last resort as there are easier ways to encourage tenants to pay rent on time.
Ensure you outline the correct procedures, which should include convenient payment methods. Also, you can try the carrot and stick approach by using an incentive and applying consequences for late payment. Finally, you can hire a property manager to make rental collection swifter and more effortless.