A landlord's job used to require some good walking shoes. Knocking door to door, they would greet tenants every month and ask for their rent.
But the old days of manual, labor-intensive processes are thankfully over. It means you can expand your rental empire without investing in sturdy shoes. Read on to learn about the five best modern practices for rent collection.
1. Use a Payment Platform
A digital payment platform is the modern way to collect rent. It's convenient, efficient, and reliable.
It makes it easier to store and track rental payment records for the landlord and the tenant. Plus, many offer automatic notifications to remind tenants that payment is due.
A digital payment platform also lowers the risk of misplacing money like cash and checks. Always research before choosing a platform to ensure a good fit. Prioritize systems that offer the best security and speed.
2. Set Your Payment Terms
When you present a lease agreement to a tenant, include payment terms. Make these rules clear and fair so it's easy for your tenant to understand. And give your tenant the chance to ask any questions before they sign.
Having these rules on paper means there is clarity about issues like payment methods, grace periods, or late fee penalties. It's transparent and minimizes problems later on.
It also protects you legally if you run into problems in the future, as you'll have a signature from your tenant on an agreement that outlines your payment terms.
3. Be Fair but Consistent
Your policies around rent collection must be reasonable enough to maintain a good relationship with your tenant.
After all, mistakes happen, and in many cases, they are quick to resolve. But simultaneously, you must protect your rental property, which means you must be consistent with your rules.
The law will help guide you here. For example, you must abide by Colorado's state rules when applying late fees. That states a 7-day grace period is offered to the tenant before the tenant incurs late charges.
4. Offer Payment Flexibility
It's good to offer your tenants flexibility about how they pay. Providing them with an option that suits their circumstances makes you more likely to receive reliable, on-time payments.
For example, suppose a tenant doesn't want to pay online because they aren't comfortable using technology.
In that case, allow them to pick a method that suits their needs. That will help you build a stronger, long-term relationship with your tenant.
5. Remember the Importance of Communication
Good communication is at the heart of any landlord-tenant relationship. And that includes communication about rent.
Make sure you are available and approachable so the tenant feels comfortable speaking to you if they have payment issues. Likewise, feel confident about approaching tenants.
Send them gentle reminders about payment dates a few days before their rent is due. It will help you avoid minor issues like a tenant forgetting their rent.
Rent Collection: Making It Work for Everyone
Getting rent collection working well means finding a solution that helps you as the landlord and supports your tenant. You can use these five tips to guide you.
PMI Aspire can also take the task of rent collection off your hands. To learn more about this and other property management services we offer landlords, head here.