Rent in full and on time
RENT: In full and on time
Every Landlord would love to walk out to the mail box on the first day of each month and open it to find that all of your rent checks are sitting there waiting to be cashed. This is usually not the case, with years of experience under my belt I can tell you it is quite rare to have all the rent checks submitted on time. When I first became a Landlord I always just assumed the tenant would pay on time and not ever bother me. As it turns out, I was completely wrong. The tenants would pay on time the first month, then pay a few days late the second month. By the third month, I was lucky to get a call 5 days after the rent was due, just to inform me they would be mailing the check in a few more days. By month six, these tenants would pay about half the rent 5 days late and pay the rest when they got paid next two weeks later. I could not believe how ridiculous this was getting. I have rented before and I was never a day late with my rent. Usually I paid my rent a few days early to make sure the Landlord got it on time. Now here I was 15 years later, collecting rent 2 to 3 weeks late each month.
I first blamed the tenants, and I complained about their habits and lack of respect for the rental lease agreement they had signed. But after a few years, I started to realize that maybe I was the problem. I didn’t have a set list of guideline to what would happen if they paid late. Since I was so lenient with the tenants early on they continued to push the envelope a little further each month with a new excuse. I had finally had enough. Upon further discussion with my close friend who had hundreds of rental units, I learned this tactics to increase paying on time. Everyone has bills and expenses and whoever has the most strict guidelines and rules usually gets paid first. Why should I let a tenant pay the rent two weeks late just so they can pay their $500 car payment on time? It is imperative to get a comprehensive lease with all the directions and rules for paying rent and have the tenants carefully read it and follow it. If they agree to all of the clauses by signing the lease then you must do your part and follow your end of the agreement also.
Start with a clear list of expectations and guidelines and follow with a list of consequences for not following the guidelines. I personally don’t like waiting until the 3rd, 5th or 10th of the month to collect my rent so I make the rent due on the first of the month. I check the post marked date on the rent check and as long as it states the first of the month of earlier the tenant has followed the instructions. Second, I charge a 10 percent late fee the next day. I have found that grace periods do not work well for most tenants. If rent is due on the first but you don’t charge a late fee until the 5th, many tenants will not mail the check until the 5th every month. This is unacceptable to me so I do not allow a grace period. If a tenant always pays on time and is late once, I will sent them a late notice reminding them that the rent was paid late and the next late payment will result in a late fee. If you want respect from your tenants you must follow through with your word. If you say you will add a late fee next time they are late, make sure you add the fee. In my lease, if a tenant pays late more than once they will receive an eviction notice posted on their door along with a late fee. This usually adds a level of seriousness to the situation, and in my experience it improves compliance.
Don’t be afraid of added the fees that you both agreed to when signing a lease agreement form. The terms and conditions are fairly easy to understand so make a point to follow them. Once a tenant knows for sure that you mean business they will be exponentially more punctual with the rent payment. I have tested this theory over and over again with fantastic success. Do you want to open your mail on the first and count up all your rent checks? Or would you prefer to call each tenant on the 10th each month to ask them when they plan on paying?
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