If you’ve ever had a tenant pay late, then you know how frustrating it is to sit and wait for that cheque to arrive. Chasing down rent payments is a colossal waste of a landlord’s time, yet many landlords experience this problem at least once.
While rent payments are a tenant’s responsibility, there are some mistakes landlords make that can increase the likelihood of late payments:
Not Reporting Rent Payment History
Landlords who Report Rent Payments to a credit bureau through TVS can provide both incentive to good tenants and disincentive to bad ones.
Tenants who want to build better credit and rental history can earn a Certificate of Satisfactory Tenancy that demonstrates financial responsibility. For those less responsible tenants, knowing rent payments will be reported to a credit bureau each month is reason enough to pay on time.
Additionally, the corresponding Notice to Tenant is included with the tenancy agreement and educates tenants on their responsibilities regarding rent payments — and the consequences of paying late.
No Local Presence
Requiring tenants to mail cheques to a faraway location is a recipe for disaster. Some tenants will become embolden to break the rules or neglect the property because the first of each month is a persistent reminder that the landlord is absent. Other tenants will become confused about their day-to-day role in caring for the property.
Use a property management company to collect rent, rely on automated rent collection, or arrange for a business or acquaintance to lend their local address and forward or deposit the rent money.
Not Depositing Rent Cheques Immediately
In the era of online banking, tenants easily can determine exactly when the rent cheque is deposited. And, they are watching. No amount of cajoling, threatening or warning a tenant will prevent late rent payments if the tenant sees the landlord hold on to the rent cheque for days — or weeks.
Not Sending Reminder Notices
Holidays, weather, work — there are so many things occurring in tenants’ daily lives that distract them from remembering that rent is due. On top of that, virtually all other creditors send out invoices or collect payments electronically. Landlords already are at a disadvantage when it comes to on-time rent payments. Improve your odds by sending out a reminder 5-7 days before the rent payment is due.
Follow up with a rent receipt or thank-you email once the cheque has arrived. That helps to reinforce the pattern.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
Click Here to Receive Landlord Credit Reports.
Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.