When you own Orlando rental property, the success of your rental experience typically all comes down to rent. You need to have your rent paid, and you need to have it paid on time.
This probably seems pretty easy, right? Your tenants know how much is due, when to pay it, and how you expect to receive it. So, there’s nothing that stands in your way of getting the rent check on the first of the month. Then, it clears quickly and that’s that – rent has been collected.
It doesn’t take long for most landlords to learn that rent collection is not that simple. Even well-screened tenants can hit a difficult patch in their lives. If they have to deal with a divorce, a job loss, or even an unexpected car repair, they might be thrown into financial chaos, and that good tenant will find he or she cannot pay rent. This puts you in the collections business, whether you had planned to be there or not.
Even worse is when your tenants aren’t only late with rent – they’re not intending to pay it at all. Then, you’ll be facing an eviction. Take it from the team at Specialized Property Management – as your property management leader, we think there is a better way. Today, we’re sharing our expertise and our resources with you, and we’re giving you 7 steps to better rent collection. If you follow these specific steps, you’ll always have rent coming in.
Step 1: Better Tenant Screening
The process of rent collection actually starts back at the beginning, before you even have a tenant in place. You have to conduct rigorous tenant qualification and screening. If you don’t have a good screening process in place, you’re risking the placement of a bad tenant who doesn’t pay rent on time and probably doesn’t take very good care of your home.
To ensure your rent is paid on time every month, check your tenant’s credit report and look for any prior evictions. You’ll also want to verify income so you can be sure this tenant is going to have the financial resources to pay rent every month.
Talk to former landlords. Conducting a thorough reference check will help you get a picture of how the tenants have performed in the past. If you talk to former landlords and they tell you the tenant paid on time every month, you have a pretty good chance of consistently collecting your own rent on time.
A good screening process is the first and most important step in ensuring your rent comes in when you expect it to.
Step Two: Set Clear Expectations
At Specialized Property Management, we set expectations early, communicating our firm but fair rent policies up front. Your lease should be explicit in what tenants are expected to do; you should state when rent is due, how much needs to be paid, and how tenants should pay. It’s also important to include any grace periods and late penalties that might apply. When you’re meeting with your tenants to sign the lease or go over its particulars, have an open and transparent discussion about the rent. Let them know that you take it seriously and you will follow the terms of the lease when it’s late.
When your tenants know what you expect of them, they have an easier time meeting those expectations. Every tenant who moves into your property should understand his or her responsibilities in terms of rental payments.
Because your tenants have understood your expectations and their requirements, you have to enforce your rent collection policy. If rent comes in late, make sure you charge any late fees that you have included in your lease. It’s important not to waive these fees. Let your tenants know that they will be held accountable when rent isn’t paid on time.
Step 3: Provide Tenant Incentives
We offer tenants incentives for paying rent on time, and our great residents really appreciate the fact that they can work towards these rewards. Through our Specialized Resident Benefits Program, our tenants are able to save hundreds of dollars a month on the things they buy every day. These are products and services that they’re going to spend money on anyway, and when they pay their rent on time, they get special discounts which result in incredible savings.
Providing incentives like these is a great way to motivate tenants. They’ll want to be sure they get their rent in on time so they can take advantage of discount programs or any other incentives that you’re providing. It shows them that you appreciate their attentiveness to their financial responsibilities and it helps to build a better relationship between tenants and landlords.
Step Four: Allow Electronic Payments
This is an online world, and the tenants in your property expect to pay for just about everything electronically. Very few people write out paper checks anymore, and you want to make sure you’re keeping up with the trends. Allowing tenants to pay online will help you collect rent faster because it’s efficient and convenient for tenants. There’s less of a chance that those tenants will forget to pay or pay late.
At Specialized Property Management, we rely on our innovative technology-driven platform to collect online rent payments. This is been a huge benefit to us and our tenants. Residents can easily log into their tenant portal and pay rent online. Funds are then electronically deposited into the owners account via ACH.
With electronic and online rental payments, tenants can increase their security by setting up regularly recurring rental payments. When they do this, rent automatically comes out of their bank account on the first of every month. It’s the most efficient way to avoid late fees and rental collections. If you don’t have property management software that allows you to collect and track online rental payments, make sure you have a way to let tenants pay electronically. It will save you both a lot of headaches and ensure you receive your rent when it’s due.
Step 5: Implement Automated Collections
Be prepared to act when your rent isn’t paid on time. If you have a grace period for your tenants to pay rent, wait for those days to pass. Once rent is officially late, you’ll want to contact your tenants immediately and take the necessary steps to get it paid. At Specialized Property Management, we have an automated collection process that gets triggered the moment rent is late. We don’t want to waste any time. Our respectful, yet tough, team acts like clockwork to enforce the lease and avoid delays.
Have a system in place that you’ll follow anytime rent is late. This might start with a phone call to the tenant or a written message. If they simply forgot and immediately pay the rent, you won’t have to do anything further. If the tenants avoid you or promise to pay on a specific day but then don’t, you’ll have to be prepared to take further action. Your goal is always to get the rent collected, so be willing to work with your tenants if they say they can and will pay.
Step 6: Seek Legal Expertise
When your tenant simply refuses to pay the rent, you’ll have to follow the Florida laws that govern eviction and regaining possession of your property. Because we are professional property managers, we always stay up to date on the current laws and regulations surrounding eviction. This lets us act as quickly as the law allows. When we are prepared to immediately serve a Three Day Notice to Quit and follow up with a filing in court, we will minimize rent-free days that our owners have to endure if an eviction becomes necessary.
If you aren’t an expert on landlord and tenant law, we strongly recommend that you consult an attorney before you file for a formal eviction. The process in Florida is pretty straightforward, but it’s still easy to make a mistake, and those mistakes can be costly. You’ll be required to start the eviction over again, or it will take longer for you to remove your tenant and find a new resident who pays on time as expected.
Step 7: Professionalism is Required
When rent is late, it’s easy for landlords to take things personally. But, you must remember that you have to treat your rental property as a business. We keep the process professional, not personal, and you need to do the same. Remember that you cannot do dramatic things like changing the locks on your tenant or shutting off the utilities to the property. These are illegal actions and could get you into a lot of trouble.
When you set expectations with tenants early, clearly and respectfully, the outcome is in their hands. You need to stay professional at all times and document everything you do during the rent collection process.
With over 35 years of experience, Specialized Property Management can help you keep the rent coming in and on time. Put our experienced team and proven process to work for you. Please feel free to contact us at Specialized Property Management if you have any questions.