THE BEST WAYS TO GET YOUR TENANTS TO PAY THEIR RENT ON-TIME
There’s always one thing on a landlord’s mind at any time, summer or winter, beginning of the month or middle – cashflow. Sure, there’s new legislation, a tighter grip on rental housing, more complications to tenant screening. There’s the ever-present worry that the water heater will break, flood one’s precious hardwood flooring or carpet, and cause molding. Even with the most elegant and elaborate rental property possible in a place with simple screening laws, a landlord will always have at least one eye watching their accounts each month. Fortunately, this is 2021 and there are some great ways to feel confident about renters paying on-time.
Humans can just be forgetful, and sometimes remembering the date is a bit more complicated than remembering the day. Setting up automatic rent payments can be easy, and your renters won’t have to worry about late fees (which you can also automate) or taking a hit to their credit (if you’re reporting their payments). Website, such as PayRent, that offer automation will oftentimes design it to be easy-to-use so you can customize the things you want to automate without having to know much about automation.
Many landlords consider incentives as a method to help goad more problematic tenants into keeping up with paying their rent on-time. Some rental owners and managers suggest something small can go a long way, such as reducing the amount of annual rent increases for tenants who pay on-time every month during their lease. Other incentives might include property upgrades contingent on longstanding lease commitments from reliable renters. This could include renewing a great tenant’s lease for an additional 24 months, and replacing a major appliance with something more modern. The benefits of this practice create a win-win where the tenant is happier in your property, your property gets an upgrade, and you lock-in reliable cashflow for an extended period of time.
In psychology there are the concepts of positive and negative reinforcement as a way of teaching people to behave in acceptable ways. If providing incentives is ‘positive reinforcement’, then disincentives try using ‘negative reinforcement’ to get the job done. This could be something as simple as late fees. By tacking on an extra few dollars, a tenant can be dissuaded from delaying your rent payment a few extra days. Just make sure to check your tenant-landlord laws to see if and how much you can charge. If you are reporting your renters’ payments to the credit bureaus, then you also have the positive/negative impacts to their credit that can be used to add confidence about getting paid on-time each month. Letting your renters know that their rent payments can boost their credit is also a great way of making sure they’re aware that not paying on-time is likely to damage their scores.
Rent prices have been steadily going up, which makes it harder for tenants to think about being absolutely perfect with their rent payments. Getting them to be responsible about it can be hard for a landlord, especially when you already have so many other responsibilities to deal with. On the bright side, there are ways to make it easier, even with the skyrocketing rents around the country.