In becoming a landlord, you capture a tiny slice of the American dream. After all, real estate ownership remains one of the best investments a person can make. Still, this privilege also carries tremendous responsibilities as well. As a property owner, you're responsible for the overall upkeep of your property. One important part of this upkeep is finding the right tenants to occupy your property. You would certainly want to engage in thorough tenant screening: conduct a background check and credit check, obtain reliable references (including from former landlords), and learn about current incomes and overall financial situations of potential tenants. Although you weigh each of these considerations and then carefully select your tenants, there are bound to be times when tenants don't quite live up to the expectations that you've set. Even if you use a tenant screening service, every landlord will invariably face a tenant that doesn't pay rent on time, or at all, each month.
It's incredibly distressing as a landlord when you don't receive a tenant's rent regularly each month. You meticulously set up your lease and property rules based on the understanding that you'll be compensated monthly as agreed upon by you and your tenants. Still, for whatever reason, some tenants miss the rent due date. You might be inclined to let it go if it's a one-time occurrence. But what happens if someone consistently misses the due date month after month? Here are a few ideas on how to get your tenants to pay their rent on time.
1) Early bird discounts:
Your tenants might be more motivated to pay their rent on time if you set up an early bird discount program. Under this program, they'll receive a discount on their rent if they pay early or on time. After all, who doesn't appreciate a good discount?
2) Auto pay:
By having your tenants sign up with an electronic auto pay program for their rent, you know that you'll receive the rent money every month as expected. Plus, it helps those tenants that lose track of dates easily.
3) Prizes:
You can reward those residents who consistently pay their rent on time with prizes. You might hold a community raffle and randomly pick out the name of one of your more conscientious tenants and present them with some type of reward. While these ideas may encourage some tenants to be timely with their rent checks, they may not be sufficient for others. In that case, your lease should clearly spell out the penalties for missing the due date. These penalties generally come in the form of late fees and other miscellaneous charges. Keeping in constant communication with a tardy tenant can sometimes help the situation. You should only consider eviction as a last resort when all other options have failed.
Being a landlord can sometimes feel like riding a roller coaster. Having a tenant that doesn't pay rent on time can make this ride seem even bumpier. Still, with some creativity and tact, you can get even the most troublesome tenant to pay rent by the due date. This will not only make the relationship with your residents better, but it will also help smooth your nerves--and your wallet.