Since the COVID-19 pandemic, many tenants in Memphis, TN have been struggling to pay rent. As a landlord, it's your job to help ease their burden.
Having a solid rent collection process is about more than ensuring a steady cash flow. It's a key building block in any landlord-tenant relationship. The more you simplify this process, the more your tenants will trust you.
Want to know more about how to collect rent more efficiently? These five tips will help you avoid most of the challenges you may end up facing!
1. Screen Tenants Thoroughly
The first step to effective rent collection is minimizing future payment issues. You can do that by having a solid screening process. A prospective tenant's credit history, for instance, can help you identify financial red flags.
For another layer of assurance, contact the tenant's previous landlords. They can offer an honest perspective on the tenant's punctuality in payments. You can also ask the tenant to verify their income and employment.
2. Draft a Clear Rental Agreement
As far as property management tips go, having a clear lease is essential. A good lease will reduce ambiguity and minimize potential disputes. This will serve as the foundation of your relationship with the tenant.
Rental specifics are a key part of the rental agreement. In this section, you'll outline the rent amount, payment methods, and due date. You'll also need to add any details on potential rent increases and other contingencies.
3. Provide Electronic Payment Options
Speaking of rent payment methods, it's important to give tenants some options. Beyond traditional methods, a good way to streamline this part of the process is to offer electronic payments.
Electronic tenant payment solutions offer a lot of convenience to tenants. They have quick transaction times and minimize the chance of errors. Plus, digital payments make it easier to keep track of your accounting.
4. Send Monthly Reminders
One key piece of landlord advice is to have consistent communication with tenants. This includes sending monthly rent reminders. This will help reduce the chances of them postponing or overlooking their payments.
If you're using digital platforms to collect rent, you can include direct links to the payment gateway in your reminders. Your reminders can also notify tenants about the potential benefits of early payments.
5. Implement Late Fees
Your rental agreement should also have a late payment policy. This will help establish the right expectations from the outset. The late fee can be a proportion of the monthly rent or a predetermined amount.
If a tenant is still late with their rent, consider giving them a grace period. This means giving them about 3-5 days before levying the late fees. Try to find a balanced approach between consistency and fairness.
Rent Collection and You
Your rent collection process is the lynchpin of your property management strategy. It ensures you're getting paid on time and allows you to build trust with your tenants. The above tips will help you perfect this process!
Need professional help with rent collection in Memphis? At PMI of Memphis, we offer an on-time rent guarantee that you'll get paid by the 10th business day of each month! Contact us here for a free consultation!
