When offered several investment choices, investors may choose a property investment because of its steady and constant cash flow. Steady cash flow can allow a landlord to calmly pay off their mortgage, utilities, and other financial responsibilities.
That is why, as a landlord, you need to learn how to foster on-time payments from your tenants. With several years of experience in the local property market, Sun-Pro Realty and Management offers its advice.
Using the following tips, you can substantially increase your chances of receiving on-time rental payments.
Conduct Thorough Tenant Screening
For you to enjoy the benefits of on-time payments, you must thoroughly look into the quality of your tenants first. What you are looking for is responsible and trustworthy tenants who will comply with the building regulations, including on-time payments.
Quality tenants can be identified by using a comprehensive tenant screening solution. Tenant screening assesses a potential tenant’s ability to fulfil the terms of the lease agreement. It’s recommended that landlords request an applicant’s financial information, verify their employment, and ask for references from previous landlords and other key persons.
Remember to always verify Florida landlord-tenant laws before requesting a tenant’s personal and financial information. Should you want help conducting the tenant screening process, consider requesting the assistance of a reputable and reliable property management company in your area.
Implement Convenient Payment Methods
Is it possible for your tenant to pay their rent from a hundred miles away, or do they have to make a physical deposit at the local bank? Without convenient payment methods, a tenant may be more likely to pay their rent late, especially under circumstances such as travel or illness.
Consider using multiple payment methods, including more convenient options like digital payment platforms. Such platforms are generally easy to use and quick to set up, making the process easier for tenants.
Another advantage of such platforms is the ease of tracking. Landlords will be able to track payments and keep accurate records of all the money coming in.
Provide Clear Instructions
Even with the most convenient payment platform, landlords can expect a delay in payments if there are no clear instructions. Payment instructions should always be clearly described to the tenants upon leasing of the property, both in person and in writing, as part of the lease agreement. Tenants should be aware of:
- How much they are paying each month.
- When the rent payment is due.
- Which payment platforms they can use. If you are incorporating traditional payment solutions, let tenants know they should forward receipts to you via mail or messages.
Offer Incentives
Everybody loves feeling appreciated, including tenants. Should you have a good tenant on your premises who has been paying their rent on time and complying to the property’s rules, consider offering them incentives to continue doing so.
Incentives may include rent discounts, coupons, or services. Partner with a local company or service provider to offer tenants mutually-beneficial incentives.
While they might seem like a small thing, these incentives go a long way to show your appreciation, and just may encourage tenants to stay for the long-term.
Apply Penalties and Late Fees
If other solutions don’t work, consider incorporating a late fee payment or penalty to encourage tenants to pay on time.
Before enforcing these late fees and penalties, inform your tenants about them. Discuss it with them in person, and make sure to include the late fee/penalty clause in the lease agreement. Ensure they’re aware of the consequences of late payments before and after signing the lease.
Be Understanding
If a tenant has been paying their rent late on several occasions, it might be a good idea to sit down with them and ask why they have been playing late consistently. There could be a reason why they are having issues paying their rent on time and a show of compassion could go a long way.
Once you understand your tenant’s issues, find and offer an amicable solution that creates a win-win scenario. Sometimes, the solution might be as simple as sending regular payment reminders.
Enforce the Lease Agreement
The lease agreement is one the most important documents for any rental business, as it establishes and legally binds the relationship between the landlord and their tenant.
While it’s important to be understanding and offer amicable solutions when appropriate, it’s crucial to remain consistent and ask tenants to follow the same rules. Enforcing the terms of the lease agreement ensures there is no favouritism and that every tenant is treated fairly and equally.
Conclusion
To ensure you receive on-time payments from your renters, make sure to conduct effective tenant screening, offer appropriate incentives, and enforce your lease agreement. Should you ever feel overwhelmed with the management of your rental unit, you can rely on Sun-Pro Realty & Management.
We are a full-service property management company offering a broad range of solutions and services. Our company manages single-family residences, apartment units, and townhouses in Daytona Beach and beyond.
Do you want to hear more about our services? Get in touch with us today!