As a landlord, you rely on rent to be paid on time to keep your operations up and running. But collecting rent can be a stressful part of your duties — but it doesn’t have to be. When renting or leasing out an investment property, it’s important to determine which rent collection method makes the most sense for you.
By working with a commercial property manager like Price Commercial Management, you can have peace of mind knowing that collecting rent will no longer be a burden on you. If you’d rather collect rent payments from your tenants on your own here are a few pieces of advice from our property management team to help make the process more efficient.
The Most Effective Ways to Collect Rent
Factors to Consider
- Number of Tenants – Depending on the type of property you’re renting out, you may find yourself with a single tenant or quite a few tenants you need to collect rent from. If you have a property with multiple rental units, you likely will want a streamlined and efficient rent collection method so you don’t need to track down 20 tenants in person when rent is due.
- Proximity to Rental – Do you reside in the same town as your investment property or is it located out of town (or even out of state)? If you don’t live near your property, opting for an electric method or utilizing a property management company may be beneficial.
- Tenant Relationship – What is your current landlord style? Do you prefer a more hands-off approach or do you like interacting with your tenants regularly? This may impact whether you want to collect rent in person or opt for an online approach.
Rent Collection Methods to Consider
- Online – One of the most common ways for landlords to collect rent is online through a payment platform. This will often allow tenants to set up automatic payment plans. So you’ll never have to worry about tracking down a missed or late payment.
- Mail – If you aren’t ready to go fully digital yet but still want a slightly more hands-off approach, you can have your tenants send in their rental payments via the mail. However, it’s important to keep in mind that you are more likely to experience delays (or excuses for a late payment) when relying on the postal service to deliver the rent.
- Drop-off Location – If the property is close, you may have your tenants drop off payment at your office.
- In-Person – If you have a small number of tenants, you may prefer to collect rent in person. This ensures you receive the payment on the day you want it. The downside is it can be time-consuming. You may need to track down your tenants and set up a time to stop by for collection.
- Property Management Company – Another option is to outsource the property management of your property. A property management company can handle the rent collection each month. If a tenant isn’t paying their rent in its entirety, they’ll chase down the tenant until the bill has been collected. This ensures you get your monthly payments without needing to lift a finger of your own — allowing you to put your focus elsewhere. Along with collecting rental payments, a property management company can fill vacancies, field tenant complaints, and handle maintenance issues.
How to Increase the Chances of Collecting Rent Payments on Time
Getting rent payments on time is top of mind for any landlord. This is why you are likely looking for ways to increase the chances of being paid on time, every time. One of the most effective ways is by enforcing a late fee with your tenants. Having a late fee in place helps to motivate tenants to submit their payments on time. However, it is important that this fee is communicated with the tenants beforehand. If rent is late, enforce your rule on late fees. Allowing excuses early on will demonstrate to your tenants that they won’t face consequences if rent is late.
If enforcing a late fee isn’t working, or you’re looking for another method, you could consider offering your tenants an incentive for paying their rent on time. You can customize these incentives to your property. For example, you could reduce rent by a specified amount if they pay before the due date. This not only ensures you get paid but helps you get paid earlier than needed. Incentives can be very effective as a reward instead of punishing them for submitting their payment late.
When to Hire a Property Management Company
Having a commercial property manager who can collect rent takes the pressure off you each month. A Price Commercial Management property manager will determine the best methods for collecting rent that works for both you and your tenants. You’ll have more free time while we focus on ensuring rent is collected each month. Additionally, we’ll ensure that your properties continue to be a source of future income.
Price Commercial Management crafts customizable property management plans based on client needs, including:
- Rent Collection
- Lease Enforcement
- Monthly Property Reporting
- Expense Management
- Revenue Enrichment
- Property Assessments Scheduling
- Routine and Preventative Maintenance
- Relationships with Licensed and Insured Contractors
- Aesthetic Maintenance
Free yourself from the hassle and burden of managing your own property or that other sub-par property management companies have added and let our trusted and proven record go to work for you.