As most Memphis rental property owners know, collecting rent is one of the most rewarding and important aspects of owning a home and working with tenants. You need that rental income to be consistent.
However, talking about money and requesting rent that is owed can sometimes be awkward and stressful. It can take a lot of time, especially if tenants need constant reminding or pay late.
How can you ensure your Memphis tenants pay rent on time?
Establish and Enforce a Rental Collection Policy
Your first step in getting tenants to pay rent on time is establishing a rent collection policy. This should be included in your lease agreement. The documented policy will ensure tenants can’t complain that they didn’t know when rent was due or they weren’t sure how to pay.
In your rent collection policy, outline in detail the following things:
- When rent is due. Typically this is the first of the month. Include information about whether there’s a grace period. For example, maybe rent is due on the first and then considered late on the third.
- How much rent is due. State the amount of rent that tenants must pay in full every month.
- How rent should be paid. Let tenants know where to send the rent check or what else they can do to get their payment in on time.
- Consequences for late rent. Perhaps you’ll charge a late fee when rent isn’t paid on time. State that in the rent collection policy and in the lease agreement so tenants understand the consequences. You’ll also want to put in writing that the ultimate penalty for nonpayment of rent is cancellation of the lease agreement and eviction in court.
When you have a rent collection policy in place, you need to enforce it. Don’t blow off those late fees or accept partial payments. Tenants need to know what’s expected of them and they also need consistency.
Offer Several Ways to Pay
Most tenants prefer to pay electronically. Memphis property management companies have the software available to accept online rent payments with ease. If you aren’t working with property managers, you can still use online payment apps to accept electronic payments. Just make sure the money is easily tracked and a receipt is provided to your tenants.
You might also want to provide several ways for tenants to pay. When they have different options, they’re less likely to pay late. Accept checks or money orders. If they want to pay in cash, you can partner with retailers like Walmart and 7-11 to allow tenants to pay in cash at the store. Then, the rental amount is deposited into your account.
Keep Communication Open
A good tenant relationship will dramatically cut down on late rent payments. Make sure you’re open and transparent with your tenants. Be accessible and available. If a good tenant runs into a financial difficulty one month, they’ll want to feel safe coming to you to explain that rent may be a day or even a week late. It’s better if you know about this ahead of time, so you can plan your own finances.
When it comes to collecting rent on time, don’t let it be a hassle. Our real estate experts have you covered. We will provide effective and timely rent collection services, as well as a financial report for you so you know exactly what your financial standing is regarding your rental property expenses and income. Contact us at RiverTown Realty for any of your Memphis property management needs.