There are currently almost 50 million households living in rented housing in the U.S.
So there has never been a better time to invest in real estate to rent!
But, if you don't go about collecting rent the right way, you could end up with empty pockets. This can be a difficult subject, especially for new landlords.
Don't fret, though! This article covers everything you need to know about rent collection. It talks about rent policy, communication, and different ways of collecting rent payments.
Have a Clear Rental Policy
The first step to preventing problems is to make sure you have a clear rent collection policy. Being upfront with tenants before they move in means that they can agree to the terms and ask any questions.
All good rental policies should include the following topics:
- How much rent is
- How and where they pay
- Partial payments
- Rent due date and grace periods
- Late payment fees
- Consequences of late or missed rent
Make sure that you enforce this policy with all tenants, don't make exceptions. These policies help to protect you under Hawaiian laws for landlords and tenants.
Communication is Key!
Keeping communication strong about rent is the best way to prevent problems. Make sure you have covered all the terms and conditions of the contract with your tenants.
It is easier than ever to keep in contact. Automated reminder messages and online calendars are available to most people.
Create clear boundaries around how flexible you are with rent payments. If they become unresponsive, start pushing the consequences outlined in their lease. Eviction can be expensive and time-consuming. So try to exhaust all other options first!
Different Ways to Collect Rent
There are various ways to go about collecting rent, which suit different landlords. As a rule of thumb, choose the way that is fastest and easier for your tenants, as this reduces the chances of late rent.
Online payments are a flexible and convenient way for tenants to make rent payments. There are lots of different money transfer apps and websites available. Most of these are free or only have a small fee.
Online banking is also good as it facilitates automated payments. But, there could be fees for these transactions depending on the bank. So check with your bank before receiving payments this way.
Taking in-person payments from tenants is another option. This way, you can check the amount paid is correct. You also bypass any logistical or technological issues with payments.
It also allows you to build relationships with tenants. This helps keep a good line of communication with them throughout their lease.
However, face-to-face can be time-consuming. Coordinating meeting times with tenants can be very frustrating. If you live out of town or have lots of properties, this isn't a good option for you.
Property Management Company
You could also choose to hire a property management company. Property managers can help you with rent collection. They are particularly helpful if you have a large number of properties, as it can be hard to keep track by yourself.
Don't Sweat Rent Collection!
Rent collection can seem like a lot of work, but it doesn't need to be stressful. Following the steps here will help you and your tenants when they have to pay rent. Clear communication and policies are key!
The Home River Group is a professional property management company based in Kona, HI. They are experts in helping landlords get the most out of their properties and simplifying rent collection.
Looking for a stress-free rental collection service? Then get in touch for your free rental analysis!