As a real estate investor, you may rely on your properties providing you with solid sources of monthly income. You cannot risk money not coming in from them if you want to cover expenses, such as taxes and upkeep, for your properties and also have an income for you and your family.
Part of ensuring money comes in from your investments involves having your tenants pay their rent on time. You can use several simple strategies to ensure on-time rental payments and avoid going without the income you need and expect from your real estate investments.
Communicate Clearly with Tenants
You cannot expect your tenants to pay their rent on time every month if you fail to communicate clearly to them when that rent is due. As a real estate investor, you should clearly stipulate in your leases when you expect rent to be paid every month and at what point you will begin charging late fees. You should also make it clear to tenants in what forms, such as check or money order, you will accept rent payments.
Likewise, if you allow your tenants to pay their rent to you online, you should include a link to your rent payment portal in your lease agreements. It would help as well if you give details on how to create an account, pay the indicated rent and store payment methods for future use.
You additionally should have your tenants sign and initial their lease agreements. This tactic ensures your tenants agree to your lease terms and understand when rent is due every month.
Enforce Late Fees
As a landlord, you may hesitate to enforce late fees out of empathy for your tenants. However, late fees can become a compelling force to get your tenants to pay their rent on time.
Tenants may find the late fees you charge to be so financially burdensome that they realize it is better to pay rent on time rather than late. Late fees also compensate you, as a real estate investor, for the money you need for paying expenses related to your properties, such as taxes, insurance and maintenance.
Before charging penalties for late rental payments, you should check the landlord-tenant laws in the state where your investment properties are located. You can ensure you are charging amounts that do not violate the laws and give tenants cause to take legal action against you.
Report to the Credit Bureaus
Many tenants prefer to improve or maintain their good credit ratings. They do not want any blemishes on their credit reports because poor credit prevents them from securing future leases, buying a house or obtaining financing like loans.
To ensure on-time monthly rental payments, you can report late payment from your tenants to the credit bureaus. Knowing that their late rental payments could show up on their credit reports can compel tenants to prioritize paying their rent on time. They know they can avoid having a tarnished credit record if they make their rent payments on or before the first of the month rather than late every month.
Send Out Email Reminders
As a real estate investor, you might keep a busy schedule. You may lack the time to sit down and type or write out monthly rental invoices for all of your tenants.
Rather than take time out of your busy work calendar for such a task, you can send out email reminders every month to tenants about their approaching rent dates. This option saves you time and lets you focus on more important matters rather than writing or typing out individual rent invoices for each of your tenants.
You can also use a form email and set it up to send out automatically to all of your tenants every month. These emails not only remind your tenants to pay their rent on time. They also provide you with written proof that you did your part as a landlord to ensure monthly on-time payments. You can take this proof to court, if necessary, if or when you have to evict a tenant for non-payment of rent.
Offer Occasional Discounts
Tenants like to be rewarded for paying their rent on time. Not only do they get peace of mind for another month that they have a roof over their heads. They may also want to know that you, as their landlord, appreciate them making an effort to pay rent to you on time each month.
To acknowledge this effort, you can give out occasional rewards, such as a discount off the next month’s rent, to tenants who pay their rent on time. Such a discount can come in handy for tenants during certain times of the year, such as around Christmas or New Year’s Day. They can use the money that they saved from your discount to pocket or put towards celebrating the holidays with their loved ones.
Uphold Your Landlord Obligations
Finally, on-time rental payments should reflect your effort as a landlord to uphold your obligations toward your tenants. For example, you have the responsibility of making timely repairs to their apartments or houses. You also must ensure their places are safe and clean in which to live.
If you fail to uphold your proverbial end of the bargain as a landlord, you may give your tenants the right to issue you a 14/30 notice and withhold rent from you. To avoid giving your tenants any reason to not pay their rent on time, you should prioritize making needed repairs on time, keeping your real estate investments safe and sanitary and otherwise fulfilling the state-required obligations you take on when you lease out your properties to tenants.
Knowing what is expected of you as a landlord and likewise ensuring on-time rental payments can be challenging. Rather than figure out such legalities on your own, you can rely on the professional and experienced real estate investment services at Upside Investments. Contact us today to learn how to ensure you get your rent payments on time each month.
