Investment properties are a great way to earn extra income. In the United States, 40% of single-family rentals are managed by individual landlords.
Being a landlord and managing your own rental properties means doing all the legwork yourself. This includes marketing your property, screening tenants, and collecting rent.
Rent collection is one aspect of investment real estate that can be one of the most challenging. This is especially true if your tenants are often late with rent payments.
Fortunately, this article is here to help you streamline your process. Keep reading to learn how to make rent collection more effortless today.
Set Rent Collection Terms
The first way to make your rent collection process smoother is by starting at the beginning. This means you should clearly state your rent collection terms in the lease agreement when you sign on new tenants.
When you state the rent payment terms in the lease, your tenants know when to make the monthly payment. It can also help your case if you want to take legal action against a tenant who has stopped paying rent.
Use a Tenant Portal
Another way to make rent collection a breeze is to use an online payment system like a tenant portal. An online tenant portal will allow your tenants to create an account. Once they have signed up, they can use the tenant portal for several tasks, such as:
- Paying rent via several methods (i.e., credit card, debit card, e-wallet, or bank transfer)
- Submitting maintenance requests
- Communicating with you
- Reviewing lease agreement
- Accessing important documents
Automate as Much as Possible
Next, you want to automate everything as much as possible. This means using software to remind tenants before rent is due automatically. This way, they can have adequate notice, which reduces the risk of your tenant forgetting or not budgeting correctly. You can also use the system to send late rent notices and fines.
Enforce Late Payment Fees
If you want your tenants to pay rent on time, another method is to enforce late payment fees. This can be up to five percent of the rent in most states but check your state laws first. Late fees can help deter tenants from intentionally delaying or forgetting rent payments.
Hire a Property Manager
Our final tip for streamlining rent collection is to hire a property management company to handle your investment properties. A qualified property manager will take over all responsibilities and will liaise with your tenants directly on your behalf.
Make Rent Collection a Smooth Process
There are several things landlords can do to streamline their rent collection process. Setting clear rental terms, using a tenant portal, automating as much as possible, enforcing late payment fees, and hiring a qualified property manager can make rent collection more effortless. Additionally, these steps allow landlords to free up time and focus on other aspects of their investment properties.
If you want to streamline your investment property responsibilities, contact us today. We're a full-service property management company servicing South Jersey, NJ.