Published On: Wed, Feb 14th, 2024

How to Consistently Collect Rent on Time

As a landlord, the name of the game is simple in practice. To be successful, you need to collect more rent each month than it costs you in taxes, insurance, interest, and maintenance. If you consistently do this, you come out ahead. 

But here’s the thing: Real estate investing almost never perfectly mirrors what’s supposed to happen in “practice.” There are twists, turns, nuances, and challenges that require you to stay on your toes. 

If you want to be successful as a real estate investor and landlord, there are several things you have to do to ensure steady, consistent, and predictable cash flow. Collecting rent on time every month is one of the big ones.

photo/ mohamed Hassan

How to Always Collect Rent on Time

Collecting rent on time doesn’t have to be an experiment in luck. There are reasons some landlords are better than others. For the most part, it comes down to having the right systems, processes, and disciplines in place. 

Here are several helpful tips to do just that.

  • Communication is Key

First things first, talk to your tenants. Good communication can solve many problems before they even start. When a new tenant moves in, sit down with them. Explain how important it is to pay rent on time. Let them know the due date, where to pay, and what happens if they’re late. 

This chat shouldn’t be scary or intimidating. Make it friendly and clear. And remember, always be ready to listen to their thoughts and feedback. You are in charge, but sometimes tenants might have a problem or a question that can be dealt with in a unique way. If they feel they can talk to you, everything runs smoother.

  • Make Paying Rent Easy

We live in a world where you can do almost anything from your phone or computer. Why not systemize rent payments, too? We recommend that you set up an online payment system. This way, tenants can pay rent with a few clicks. It’s super easy and convenient.

In addition to giving tenants a convenient way to pay their rent, having an online portal is advantageous for you, the landlord. You don’t have to handle checks or cash, and you can easily keep track of who’s paid and who hasn’t. There are plenty of services out there that can help with this, so find one that works for you and your tenants. 

In many cases, property management companies will handle this for you. For example, Green Residential, a Dallas property management company, handles all rent collection for its clients.

  • Reward On-Time Payments

Everyone loves a little bonus, right? Think about offering small rewards for tenants who consistently pay their rent on time. It doesn’t have to be big. Maybe a discount on next month’s rent or a gift card. This is a fun way to encourage people to pay on time. And it makes your tenants feel appreciated. Feel free to get creative with this one. It’ll create a more memorable relationship between you and your tenants.

  • Set Clear Late Payment Policies

It’s important that your tenants know the rules. If rent is late, what happens? Make sure this is super clear from the beginning. You might have a late fee or a grace period, but whatever your rules are, make sure your tenants know them. 

This isn’t about being strict. It’s about being fair and clear. When everyone knows the rules, it’s easier to follow them. Your tenants will respect you more, and you won’t have to worry about how to handle individual situations. Once the rules are created, all you have to do is follow them. 

  • Be Understanding, But Firm

Last but not least, be understanding but firm. Life can throw curveballs. Maybe a tenant loses their job or has an unexpected expense. If they’re usually good with payments, it’s nice to be understanding. You can work out a plan for late payment. But, remember to be firm. You’re running a business, and rent is a big part of that. If you’re too soft, people might take advantage. 

Adding it All Up

Want to start collecting rent on time every month? Following these five tips will give you a huge advantage over the average landlord. Just make sure you’re always iterating and focusing on constant, never-ending improvement. The more willing you are to adjust your approach to the best practices of the day, the better your results will be over the long run!

Author: Anna Johansson

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