Rent collection should be easy and straightforward, right? Well, many rental owners have found just the opposite to be true. Some tenants pay rent late every month. Others forget to pay it at all! And sometimes, no matter how many reminders you give them, other tenants are just irresponsible and need to be evicted. Effective rent collection is one of the most important aspects of a successful property manager. If your rent collection process is not working, then maybe it’s time to let a professional property manager handle it for you. When it comes to choosing one of the many New Haven property management companies out there to manage your rental property, make the choice that tens of thousands of property owners have. Go with the experts at Real Property Management Southern Connecticut. Every member of our qualified team is here to help rent collection go as smoothly as possible for you as the landlord. We want to share some suggestions with you for better rent collection.
Rent Your Property to Reliable, Trustworthy Tenants
Connecticut renters make up about 30% of the state’s population. That means there are plenty of people to pick from who want to rent your home. A lot of landlords make the mistake of renting their home to the first prospective tenant who walks in the door. Don’t be in a rush to rent! Smart landlords are those who only lease their property to responsible tenants who meet their qualifications and standards. You’ve got to have an efficient tenant screening process in place to weed out the good tenants from the bad ones. You should absolutely screen every tenant with a thorough background check. Here is what you need to determine:
Credit: If the applicant has a super low credit score, ask them about it and decide whether or not you want to risk renting to them.
Criminal: Anything criminally violent that the person has on their record like a sexual assault, burglary, or any past arrests should be found out and looked into before you lease to them.
Rental History: What kind of tenant were they at their past two residences? Did they leave any damage? Talk to previous landlords to find out.
Employment History: Look at the applicant’s past few years of employment history. If they have trouble holding down a job for longer than a few months, you might want to find a different tenant. Chances are, if they can’t get work, they can’t pay the rent every month.
Be sure that as you conduct your background checks, you are comply with all Fair Housing guidelines. You cannot discriminate tenants based on race, color, national origin, religion, sex, disability, or the presence of children. You should also have each tenant older than 18 years old fill out an application. New Haven property management companies know that if you follow a rigorous screening process, you’ll be more likely to find a tenant who consistently pays rent on time.
Be Clear About Your Rent Collecting Policies
Before tenants sign a leasing agreement, explain your rent collecting policies. Go over every aspect with your tenant, even the details that may seem unimportant or obvious. Tell your tenant what the actual rent will be every month (including any utilities) and when it is due. Talk to them about when the rent payment is considered late and discuss what actions will be taken if rent is constantly overdue. It is imperative that you communicate to your tenant that your real estate management rent collection policies are non-negotiable. You will have fewer issues with rent collection down the road if you can be upfront and firm with your tenant from the get-go. Set your expectations early and keep them high.
Use Electronic Rent Payments
In this day and age, most everyone pays rent online. To make your rent collection effective, set up electronic financial transactions. Funds will automatically be sent through ACH into your account. This minimizes your hassle and makes things easier for the tenant as well. If you decide you’ll take checks or cash as a rent payment, be prepared to deal with bounced checks, late payments, or other excuses from your tenant.
Have an Automatic Collections Process
It’s nice to give tenants second and third chances, but chances don’t pay the rent. You need an efficient collections process that will automatically begin if rent is late. First, an automatic written warning needs to be mailed to your tenant. After the warning, a written notice should be sent. A second and third written notice should follow that. Finally, if all notices are ignored, and no rent is paid, you need to evict the tenant from your rental property.
New Haven Property Management Companies Believe in Legal Expertise
Do you want to have an effective rent collection process? Then you should do your part of staying up-to-date on the current laws and regulations in the business. Know what you are legally allowed to do as the landlord to enforce the rent cycle and what your limits are. For example, if your tenant has not paid rent in several days, you are not allowed to go to their door any time you want and harass them about their late payment. Taking action such as this could actually hamper your court case if the tenant decides to sue you. Be sure you comply with all housing and landlord-tenant laws before you act. In case an eviction arises, minimize rent-free days by booting out the irresponsible tenant as soon as you can and finding someone who will consistently pay the rent on time.
Keep it Professional, not Personal
Many landlords decide to rent out their own home they’ve recently moved from. Though leasing your home can be a great financial decision, it’s difficult to not get personally involved. A lot of property owners have certain memories attached to their homes and don’t want to see tenants alter it at all. Just remember that by leasing your home, you are turning it into a business opportunity, and you have to treat it as such. Don’t get emotional and don’t overreact!
Just to summarize, there are a few steps you can take to have a better rent collection process. They are:
- Rent Your Property to Reliable, Trustworthy Tenants: have a comprehensive tenant screening process in place that checks a tenant’s credit history, criminal history, past jobs, and rental history so you can find a responsible tenant.
- Be Clear About Your Rent Collecting Policies: explain your rules and the reasons behind them to your tenant to ensure they understand why the policies are necessary.
- Use Electronic Rent Payments: simplify rent collection by allowing tenants to pay rent online.
- Have an Automatic Collections Process: don’t give your tenants multiple chances to pay rent late. Send out automatically written warnings if rent is not paid on time.
- Legal Expertise: know the laws and regulations you are required to follow as the landlord, so you don’t get into legal trouble with your tenant.
- Keep it Professional, not Personal!
Your real estate management rent collection process can make you or break you! Minimize your hassle and save some time by hiring Real Property Management Southern Connecticut. We want to be your #1 choice for New Haven property management! Companies may claim they have the tools and expertise to help you succeed in this business, but we back it up with our 25 years of experience in this industry. Give us a call today to put our proven processes to the test!