Whether you’re a full-time landlord or a hands-off investor, there’s one thing that’s guaranteed. You want your tenants to pay their rent. On time. Every month.
How else can you expect to keep doing more of the things you like and looking after the people you love?
Thing is, you can’t exactly control the way your tenants behave. Sure, you create contracts that make it clear when you expect the rent. But whether the tenant actually pays the right amount on time? That’s down to them.
The good news is that there are things you can do to maximise the likelihood that you’ll receive the rent in full on time, every month.
No need to fret over your own bank balance…
No need to even consider the time-consuming, stressful prospect of eviction…
The National Landlords Association reckons it takes an average four months and £900 to end a tenancy before the contract has run its course. So eviction really should be a last resort.
The National Landlords Association reckons it takes an average four months and £900 to end a tenancy before the contract has run its course. So eviction really should be a last resort.
Instead, it’s all about taking the right steps from the get-go, and forming a relationship where the tenant wants to pay on time. So how do you do it?
1. It’s all about communication
We say this all the time, but good communication is absolutely crucial for every landlord and managing agent.
From the start of the tenancy, you want to be having friendly, open conversations about rent. It’s one thing being clear in the written tenancy agreement about your expectations for rent, but your tenant will remember the rules much more clearly if you actually speak to them about it.
That means having a face-to-face conversation or picking up the phone.
The more you talk about paying rent on time, the less awkward it is as a subject. So tell your tenant you’d always rather they were honest with you if there’s going to be a problem paying the rent.
2. Set up rent reminders
Tell every tenant that you’ll be sending them rent reminders at the outset of their tenancy. (And then actually go ahead and set those reminders up!)
A text or email alert received three days before the rent’s due really does work wonders and will increase the likelihood of that payment hitting your bank on time.
3. Don’t forget to check your bank account…
It might sound obvious but if you aren’t checking your bank balance every day, you’ll miss the opportune moment to get in touch with your tenant, should they miss a payment.
You want to start the conversation about missed rent the moment it’s missed, i.e. the very next morning after due day.
By checking your account once a day, you can ensure that you notice arrears as soon as possible, meaning you can do something about it as soon as possible too.
4. Be quick to take action
No, we don’t mean send an eviction notice the day after a rent payment’s been missed.
But the sooner you get in touch, the better.
Not only does it meant that you should receive the money that’s owed to you as quickly as possible, but it’ll also reduce the likelihood of your tenant thinking that late rent payments are something they can get away with.
5. Charge a late fee
If you make it part of your terms in the tenancy agreement, there’s no reason why you shouldn’t charge your tenants a late fee for late rent payments.
Remember to discuss the fee in your initial conversations to make sure your tenants are aware what could happen if they fail to pay on time. And consider mentioning late fees in your rent reminder texts and emails!
6. Group rent dates together
If keeping on top of who owes what and when is becoming a problem because your rent dates are scattered throughout the date, why not make a change?
Given enough notice, it shouldn’t be a problem to change your rent due dates so that rent day is the same for every tenant.
That way, there’s only one day per month when rent (or late rent) need take up your attention, and you can get everything sorted and in order in one fell swoop.
Follow these six pointers and you’ll minimise the likelihood that your tenants will miss a payment. In fact, you’ll make them much more inclined to pay on time, the more you make it a normal part of your conversations.
Honesty’s the best policy
In many circumstances in life, talking about money is an awkward subject. But in property, the best foot forward is definitely to encourage openness from the start of every tenancy.
If a tenant knows they can come to you for a friendly, practical conversation if they’re worried about paying the rent, the more likely you are to receive your money in the long-run – and the less likely it is that you’ll need to serve a Section 21 at any point.
And if you do have a tenant approach you, it’s always best to be kind in your response. That doesn’t mean letting them off, of course it doesn’t.
But it does mean gently asking what’s up and discussing ways you can move forward so that you receive your rent on time that month, and going forward. Useful solutions include:
- Smaller, more regular payments
- Setting up a direct debit so it doesn’t matter if they forget to pay
- Changing the payment date to one that suits the tenant better
But if you’d rather avoid awkward conversations about money and get on with the things you love while rent keeps coming into your bank account – without you having to lift a finger – we’re always happy to help.
It’s one of the things we do best at Hello Owl! Want to know more? Give us a call on 020 3432 3888.
