While owning property can be a lucrative investment, it's not without its challenges. One of the most common issues that property owners and managers face is prompt rent collection.
Whether it's late, partial, or non-existent payments, the stress of paying your own mortgage and other expenses on time hangs in the balance. If you want to make the most of a rental business, this blog is here to help you secure that rental income in an efficient and time-sensitive manner.
Automation is Key
If you're looking for one of the best ways to streamline your rent collection, it's with an automated system. It not only reduces both human error and effort but makes it all the more convenient for your tenants to pay their rent on time.
In the technological world we live in today, there are several rent collection apps you can choose from to help automate the process. In short, these apps withdraw rental payments from your tenant's accounts on a pre-set schedule.
Another option is setting up automatic payment reminders as the rental due date approaches. This might include emails or texts giving your tenants a gentle nudge in the right direction.
Establish a Strict Payment Schedule
Make sure your tenants are well aware of the set dates you have in place for rental payments. A set schedule means that there is no wiggle room or leeway, thereby creating a predictable schedule of payments that will support your rental business.
It's best to decide on a standard due date that best suits your business operations. Always ensure the lease agreement clearly outlines the payment date/schedule and your tenants agree to this date.
Offer Multiple Payment Options
While rental income is your top priority, it's still important to cater to your tenants' needs as much as possible when it comes to payment options. This is a smart way of avoiding delayed or incomplete payments as it gives your tenants their own bit of flexibility.
Do some homework of your own and find out how your tenants prefer to pay their bills. What type of payment options best suit their budget and lifestyle? Direct online payments might be the best option for you, but it's still important to offer the option of credit/debit card payments, or online bank transfers. Some tenants might prefer to pay via money order or check.
Whatever option they prefer, try to leave some wiggle room in your payment terms to suit them.
Incentivize Prompt Payment
It might not always be a feasible option to incentivize every single prompt rental payment, but this is a great tactic for tenants who are notoriously difficult to manage.
Or, you could offer incentives every month as a way of encouraging prompt payments from your best-paying tenants. Some simple incentive ideas include:
- Gift card raffles
- Discount coupons for local businesses, i.e. your local coffee shop or laundromat
- A waiver on late-pay fees
Incentives aren't just a good way to get people to pay rent on time. They are a great means of motivation and can help to keep your rent collection battles to a minimum.
Rent Collection Made Easy
Whether you're the owner of one or multiple rental properties, the rent collection process can make or break the success of your rental business. If you need to streamline rent collection or need a helping hand managing your rental property account, PMI Property Management has you covered.
Learn more about our owner resources and services on offer, here.
