Financial Resource

You manage your own investment property, but your tenant had not yet paid the rent. Should you phone the tenant? Should you send email? Should you go to the tenant? What should you do with late-paying tenants? Well, the first thing that you should remember is not to panic. One of the difficult problems that a rental property owner may have is collecting rent from a late-paying tenant – or, worst, a tenant who does not pay at all. As an investor and landlord, you should be prepared to encounter such tenants from time to time. Bad payers are real pain in the neck for all property investors but there are several ways to deal with the problem.

It may not be a bad idea to set up a schedule of discount for on-time payments. This may encourage renters to be on time when they pay their rent. However, late fees should apply on late payments. Staying in control may prompt tenants to pay on time, every time. Some late payments happen not because they intend to do it but because the tenant just forgot. In this case, consider two things. One is to issue a notice of non-payment of rent as soon as the rent is late. Tenants tend to pay their cell phone use, credit card, or whatever when they receive the bills each month. This can also work on their rent. Another is to set up an automatic payment plan. This can be done by setting up automatic payments by direct withdrawal or by credit card. Again, this arrangement is assumed good intentions on the side of the tenant.

What should you do with frequent late payers? If the occupant is a consistent late payer, then you should act consistently as well. Always implement the same late payment fees and file rent invoices for every late paying tenant or those who have not paid at all. Showing consistency in your actions makes a strong precedent in case you have to support your actions in court or consider evicting the tenant. Being consistent in your actions also shows that you are fair to all tenants and at the same time firm.

A tenant, whose lateness gets worse and worse every month, even with the late fees and issues about late payments, implies that he has little regard for your authority. Then, you have to ask them to move out. Talk the tenant into taking a voluntary move out. Court-supported evictions require a lot of money and time. In case the tenant does not want to leave the property, you need to get this court approved eviction paper.

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