6 Secret to ensure that your tenants pay on time
An important part of Texas property management is making sure that your tenants pay on time. If you’re struggling with delinquent tenants, here are some tips that will help you to ensure that your tenants pay their rent on time.
- Pick your tenants wisely
Check the references of prospective tenants. Get in touch with previous landlords to find out their payment history. You can also look at their credit history to certify their capacity to pay. Have employers verify incomes. Keep in mind that your tenant should be making enough money to afford to pay the rent. This usually means that their monthly salary should be at least three times the amount of their rent.
- Communication is key
Before your tenants move in, make sure that they read and understand their tenancy agreement. Talk them through the key points of the rental agreement – rent, due dates, acceptable modes of payment, and so on. If you accept check payments, tell them name of the payee and the address they’ll mail it to. If your tenants prefer paying online, let them know your account details. You should also tell them about fees or other consequences of delayed payments.
Once your tenant is ready to sign the tenancy agreement, have them initial and date every page. This means that they have read and understood everything that’s on the lease. Make sure that they also have a copy of the signed lease.
- Talk to your tenant
If your tenant is consistently late when it comes to paying rent, you should schedule a time to sit down with them and talk about the problem, especially if it is recurring. Endeavor to find solutions.
Sometimes all it takes is an email to remind them that their payment is due. Or changing the due date or payment method, if these options will make it easier for your client. Some tenants might prefer to pay smaller amounts more frequently.
You can also request your tenants to set up a standing order or direct debit so that they won’t forget to pay their rent. Once they set up a direct debit, you’ll get a notification for failed payments.
- Charge a late fee
Once you’ve established that you’ll be charging a late fee, don’t hesitate to put this into practice if your tenant doesn’t pay on time. Be consistent in order to show your tenants that you mean business, and that you also expect them to hold up their share of the bargain. However, you may opt to drop late fees in the meantime, given the current hardships.
- Offer a discount or a reward
Try a little positive reinforcement. Offer a rebate for prompt payments. You can apply the same perk if your tenant sets up a direct debit or standing payment.
You can also give tenants who pray promptly a yearly award. It doesn’t have to be expensive: a $20 gift voucher will be appreciated, as will a small rebate. This builds trust and camaraderie and will be remembered when it comes time to renew their lease.
- Report late payments to a credit check bureau
Tenants who are repeatedly delinquent in their payments can be reported to a credit- checking bureau. Although you may want to hold off on this option based on the general economic situation, you can include this is your lease agreement for new tenants. Tell them that being reported to a credit-checking bureau will negatively affect their credit score, making it harder for them to buy big-ticket items or apply for a loan to buy a house in the future, for example. Meanwhile, tenants who pay their rent on time will reap the benefits of a better credit score.
If you’re looking for a dependable property management company in College Station or Bryan, Texas, look no further than Berkshire Hathaway HomeServices (BHHS) Caliber Realty. Get in touch with the team today by calling 979.694.8844, emailing sales(at)bhhscaliber(dotted)com, or sending your inquiries here.