Financial Resource

Bad payers or late tenants can be a big problem for all landlords and people have different ways to deal with the problem. But the best solution is one that gets the tenant to pay the rent timely and avoids a costly eviction at the same time.

The first thing you can do to ensure that all tenants pay on time is to set up a schedule of discounts for on-time payments. Alternately you can set up a schedule of late fees for late payments.

If your tenants have an excuse of forgetting to make payments, you can send out rent invoices. According to this, your tenants get a reminder in form of a bill each month for the rental payment that they have to make. After all, they do get bills for everything else every month so why not a bill for payment reminder? Another idea is to offer an automatic payment plan. You can set up automatic payments by direct withdrawal or by credit card.

But if you are dealing with a chronic late payer, whose lateness increases with every passing month, then you should warrant an eviction notice, send it, and follow through. Such a tenant will most probably not have any effect of your authority alone.

On the other hand, if your tenant is a consistent late payer, you might want to keep him for the following reasons. If he is paying a late fess every month along with the monthly rental, he is actually giving you some percentage of rent increase in exchange for a few days lateness. Secondly, you have to weigh the consequences of keeping your property empty till you get a new tenant.

You might want to be lenient with the tenants who let you know ahead of time that their payments will be late. The tenant may be out of cash or short of cash. If the lateness is not excessive -three or four days at most – you should not make a big issue out of it.

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