Paying a bill late is not uncommon. 64% of Americans have said that didn't pay an expense on time. Unfortunately, housing costs are something that a lot of people struggle with.
As a landlord, your rental business stays afloat with your tenants paying their rent. It can be challenging if your tenant is continually late on their payments or only makes partial ones. That's why figuring out the best rent collection method is important for a property owner.
This guide will discuss our top five tips for collecting rent. While dealing with missed or late payments is something you should expect as a rental property owner, there are ways to minimize that risk.
1. Ensure There Are Consequences
Having a late fee in place will motivate your renters to pay their rent on time. In Washington, landlords can charge a late fee of 20% of the monthly rental amount or $20 (whichever is greater).
Keep in mind that you don't want the late fee to be a burden on your tenants. It should be high enough that they want to pay by the due date to avoid this fee.
2. Set Expectations About Late Payments
The lease agreement between you and your tenant should lay out when rent is due. The lease should also highlight the ways they can make payments to you. It should also go over when the rent is late and what happens after that point.
If you find that one of your tenants always pays rent late, talk with them about it. Ask some of the following questions:
- When can they pay?
- Why are their payments late?
- Will they make their rent payment in full?
- How will they pay you?
Having an open flow of communication will reduce the amount of confusion about late rent payments. Make sure you have a paper trail of all communication about late payments. This will help you in the event of an eviction.
3. Offer Online Payment Options
Money orders, cash, and paper checks are considered outdated ways to collect rent payments. There are also risks with these options, such as a lack of receipt and getting lost in the mail.
Many people pay the majority of their bills online. There are many online platforms you can explore that enable you to offer online payment options to your tenants. Having flexible payment options will help you reduce the amount of late payments you receive.
4. Issue Rent Reminders
You can send your tenants rent payment reminders each month to ensure they don't forget to make their payments.
Life gets busy and sometimes a little nudge is all your tenants need to make their payments on time.
5. Rent to Good Tenants
One of the things you can look for when screening potential tenants is whether they're likely to make their payments on time. Some of the things you can look at include:
- Their credit report
- Verify their employment and income
- Contacting their previous landlord
Follow Our Tips for Rent Collection in Seattle
We hope our tips for rent collection will help you reduce the number of late payments you receive. That's why working with a professional property management company is important. Our team can handle collecting rent on your behalf.
Brink Property Management is here to assist property owners in Seattle and Bellevue. We offer comprehensive services that will increase your rental property income. Get in touch to learn more.