As a business owner operating as a landlord, you would understand that the actual sale in your business is the rent you collect. Collecting rent means having cash flow to operate your business, have enough fund to set aside to pay for repairs and maintenance, or pay any due tax on your property.
That said, you simply can’t afford the landlord-tenant chase especially when it’s time to collect rent. Sure, you can let slide one or two instances of delays on rent payment after all you want to be the fair and understanding landlord. But it is such a nightmare when delayed payments become habitual or worse, missed payments. It’s good to know that over the years even the dynamics of rent collection has changed, making it easier for landlords to collect. Although the truth of the matter is that delayed or missed rent payments is a tenant attitude issue most of the time, you as a landlord must put your foot down if you are to keep your rental business going in the right direction.
Some No-No’s to Take Note
This may have worked well for you for a time; but it’s no longer practical to do the usual door-to- door collection. Apart from it being time consuming, the cash you would have in hand may very well put you at risk of being robbed. And let’s not forget to mention tenants that should be “expecting” you anytime soon and should have their rent payment ready for pick up, only to leave you frustrated later on because you keep ringing the bell and nobody seems to be around; or if someone was around the cash or check isn’t still available. Such nuisance!
See also: Big Mistakes Landlords Make Around Rent & Eviction
For security reasons you shouldn’t be revealing your home address to your tenants. Some tenants, when faced with pressure to pay but couldn’t, may retaliate in a way that would be embarrassing for your neighbours to witness. Or you just never know when your family might be exposed to a threat from a scorned tenant. Keep an upper hand in your business relationship with your tenant by always protecting your principal home identity.
Done with the Old, on with the New . . .
Successful collective experiences from different landlords tell a new dynamics that you could now learn from. You are encouraged to explore one or two of these ways and see what works. Better yet, explore them all and find out how you can help your tenant pay their rent on time.
See also: 9 Common Problems of a Landlord (and How to Fix Them)
Rent in the Mail
Sounds traditional, yes; but mailing rent to you still works and is popular to most tenants. Experiences by other landlords have it that they receive at least 90% of the rent through their PO Box while the other 10% could be absent for variety of reasons. If you’re collecting a large sum of rent, that uncollected 10% could still feel like a huge chunk. Getting back to your tenants you might hear “It must have gotten lost in the mail”, which could also be true and so you wait. Other times you take your tenant’s word for it only to find out that it wasn’t really mailed at all. If this becomes a repeating issue then set a few side rules:
- Have a cut-off date when your tenant must mail the rent to you. Study your pattern of receiving rent in the mail and how many days it takes before the rent is actually in your hands.
- Remind your tenant of potential late fee if the rent is mailed later than your cut-off date. If the rent you receive does merit a late fee even if it’s just a day late, then make sure you impose that fee on your next invoice.
- Keep reminding tenant that rent must be in a form of check only.
ACH Payments
If you’re a landlord doing multiple collections, an Automated Clearing House system could work for you. This system allows your tenant’s bank account credit payment to your bank account; more like how automatic payments are done for home bills. While you serve as a “merchant” in this case, you would need to set this up at the merchant services department of your bank and cover for administrative fees each month. Still the benefits and convenience of this system outweighs the charges, even helping your tenant pay you on time.
PayNearMe
If your tenants wouldn’t pay online or wouldn’t pay through his bank account, the PayNearMe method could be the best option. As for your business, think collection agency partners. You leverage on the chain of stores or establishments that could act as your collecting agents in your locality: 7-Eleven or Ace Cash Express among others. Your tenant would pay you using their assigned PayNearMe card with unique barcode and you’ll be notified by the system right away; afterwards your rent will be deposited in your bank account.
[inf_infusionsoft_inline optin_id=optin_11]
In Conclusion
To sum up, in the traditional business scenario your tenants are your customers, and these payment methods are your way of service to them in making it easy to do business with you. It is your duty as a good businessman to learn about these new methods as more and more become available especially in the advent of digital technology.