The key to success for any landlord is a good rent collection strategy.
American landlords are currently experiencing a real boom in on-time rent payments, which are happening at an all-time high of 96%. Part of this is due to a bounceback in the post-Covid world, but it's also the result of wide improvements in rent collection.
So, if you're a new landlord, how do you make sure you're getting timely and efficient payments from your tenants?
In today's post, we'll go over some of the best rent collection strategies for Greenville landlords. You never want to be chasing your tenants down for rent, so keep reading and learn how to make everyone's life easier and create more financial stability.
Start with Tenant Screening
Good tenant screening practices will start your rent collection off on the right foot. When you have high-quality, financially responsible tenants renting your units, you're less likely to run into problems with collecting rent.
You can properly screen your tenants by checking their credit and calling their references. Credit scores can tell you about their long-term financial health, while landlord and employer references can tell you if they've made on-time payments in the past and if they're currently employed.
Offer Multiple Payment Methods
Having good tenants in your rentals doesn't guarantee on-time payments. It's in your best interest to make it easy for tenants to pay you. Offer multiple payment methods for different types of tenants.
Older tenants are often more comfortable with offline payments. They may want to use post-dated cheques or even cash. Younger tenants will favor contactless payments.
You should accept various forms of online payment, from Zelle to PayPal or Venmo. If you hire a property manager, they may have their own form of online rent collection.
Everyone falls on tough financial times. If you've got a tenant who misses rent day, there's no need to panic. It can be beneficial to everyone to have a grace period for your tenants.
A grace period gives the tenant a few days at the start of the month to pay rent. If they miss the first day, you can always send them a friendly reminder that they have a few extra days to pay you. Not only will this put you in good standing with your tenants, but you'll have proof of your leniency if you need to crack down on late payments.
Offer Incentives for Timely Payments
If you really need the rent on the first day of the month, you can put incentives in place to ensure your tenants make timely payments. Offering 2-3% off of rent for early and on-time payments can be an effective incentive.
Late penalties are another possible incentive, albeit a more negative one. If you've got tenants who routinely abuse your grace period, implementing late penalties can incentivize them to get their act together.
Hire Property Management to Help with Rent Collection
If you're trying to maintain positive relationships with your tenants, chasing them down for rent every month is exhausting. That's when having a property manager really comes in handy.
At PMI Upstate SC, we can help you with everything from tenant screening to rent collection. Contact us today to learn about our services and how they can help your investment property thrive.