1. Make it Automatic
Requiring tenants to pay rent via an auto-pay, auto-deduct or E Transfer system is the best way to collect rent on time. There are even multiple systems that will deposit the money automatically to your bank account. The major benefit is that this eliminates the factor of human error – i.e. tenants “forgetting” to pay rent.
There are multiple ways you can set up automatic rent payments:
2. We Choose Our Tenants Wisely
We try only to rent to qualified tenants with a great rental history. No surprise here, right? We have a seven step screening process for tenants.
- Our Criteria: Start out by being very clear about the criteria prospective tenants must meet to pass the application process.
- Income Requirements: At the very least, this should include regular income equivalent to three times the rent amount or more, and an established history of paying rent on time with past landlords.
- Check References: We believe that the best predictor of future behavior is past behavior. Therefore, thorough verification of the application information is critical to paving the way for prompt, full rent payments. We call the previous landlord and ask “would you rent to them again?
3. “No Cash” Policy
We established a policy in which you do not accept cash as a payment for rent.
We serve a legally sufficient notice of “no cash” policy and advise your tenants of acceptable ways they can make their monthly payments, such as money order or direct debit.
4. Enforcing Rent Collection Policy
In our lease, we address all payment related issues including the:
- exact amount due every month
- where payments are made
- acceptable payment methods
- when rent is due, grace periods
- the consequences of bounced checks or default.
At one point or another you may feel sorry for a tenant falling on hard times, or simply be in too much of a hurry to charge a late fee. If you are sure that a good tenant is only experiencing a “just this once” type of issue, feel free to cut them some slack.
However, to keep them from taking advantage of your generosity in the future, be firm about your policy from then on and don’t make a habit of being lenient. We suggest forgiving a late fee once, but ONLY once.
5. If they are Late, We Ask the Necessary Questions
When we come in contact with the tenant who has yet to pay rent for the month, we ask them a few questions that will clue you into the heart of the issue.
- When do you expect to make a payment?
- Where will you be submitting your payment?
- What is the exact amount that you will be paying?
- What will be your method of payment?
- What is the source of income you will be using to make your payment?
If they are evasive in answering these questions, we serve them with an eviction notice the next day.
6. Making the Consequences Known
At RE/MAX Platinum Realty we are prepared to report a past-due tenant to the credit agency. More importantly, making sure our tenants know that we will report them – which will ruin their credit.
We include a statement in your lease agreement, informing your tenants that late rent payments may be reported to the three major credit agencies also disclose that late payments may negatively affect their credit. This alone will likely keep the tenant on their toes and ensure you receive rent on time.
Obviously, you don’t “want” to report anyone, and this is more of a scare-tactic than anything else.
7. Offer Rewards to Responsible Tenants
A critical part of managing a rental property is taking care of our good tenants. Sometimes landlords can be so focused on preventing unwanted situations that they overlook the renters who make their job worthwhile.
We reward tenants that always pays rent on time, abides by the rules and takes good care of your property,we show them how much we appreciate them with an Tim Hortons Gift card and posting it on social media.
A perfect opportunity to show our appreciation is after the tenants have paid a year of consecutive, timely rent payments. A well-timed gift basket could also provides a wavering tenant with the motivation needed to renew their lease