It happens every month, whether you like it or not. Rent collections can be a time consuming and tedious process. It is the time of the month that most property managers dread. Receiving paper checks, depositing them, marking tenants as “paid,” and tracking down those who did not pay is not exactly fun. Simply choosing to have a better attitude about rent collections will not solve your problems if your system for collecting rent is out of date.
Orlando property management companies, like Specialized Property Management, have streamlined its rent collection process to make life easier for property managers, owners, and tenants. Below is a list of things that you can do to make your rent collections faster, easier, and more convenient for everyone involved.
Making your rent collections process easier starts at the beginning of the entire property management process. During the tenant screening process, it is important for property managers to perform rigorous screening practices to ensure that whoever is accepted to live in the property, qualifies. This means not only qualifying financially, but also with a high credit score and positive rental history.
Prior to listing a property for rent, determine your screening criteria and guidelines. What is the rent to income ratio that you will accept? What is the lowest credit score that you will accept? What forms of income proof will you accept? Will you allow pets? Will you allow guarantors? Will you check rental history references?
Whatever standards Orlando property management companies set for one applicant, must be set for all applicants. There are many factors to consider during the screening process. Even though tenants can be properly vetted, please remember that even the most qualified applicants can still run into a rough patch, so there is no guarantee that any tenancy will not end with an eviction. But proper screening can certainly help to reduce your chances of an eviction.
Clearly Set Expectations
At the time of the lease signing, point out the paragraph that specifies the rent collections process and the rent amount. This information should be towards the top of the lease agreement, even on the first page, as it is of utmost importance. In this clause of the lease agreement, Orlando property management companies should include how rent should be paid each month, what day rent is due, and how to pay the rent. A good rule of thumb to follow is to collect rent on the first day of every month. Many property management companies give a three day grace period for tenants to pay rent before charging a late fee. Inform the residents of the consequences that will follow if they fail to pay rent. These can include a Three Day Notice to Pay Rent or Quit along with a late fee.
At Specialized Property Management in Orlando, we like to reward our residents for on-time rent payments. When tenants pay rent on time each month, they are given the opportunity to become a part of our Resident Rewards Program. This program allows tenants to save hundreds of dollars each month on items that they buy daily. It also provides discounts on dining and entertainment. It literally pays to pay rent on time with Specialized Property Management. If providing a rewards system like the one in place at Specialized Property Management is not feasible, get creative in ways that you can let tenants know that you appreciate their on-time rent payments. Orlando property management companies have found that positive incentives go a long way when it comes to tenant retention and on-time rent payments.
Technology Driven Platform
In a world of electronic payments that can be received and sent with the touch of the finger within a matter of seconds, it is imperative that property management companies keep up with the times. The old method of handing in or mailing a check via snail mail is in the past.
There are many ways to accept rent payments including direct deposit from bank accounts, Venmo, Zelle, and the Cash App. Utilize technology to assist you in making rent collections more efficient and easier. Use banking apps on your phone to deposit rent checks quickly or transfer funds from other apps into a bank account. ACH (Automated Clearing House) deposits allow Orlando property management companies to receive rent payments more quickly than ever.
Allow tenants to set up automatic withdrawals from their bank accounts to pay rent each month. Automatic withdrawals from a tenant’s bank account will cut down significantly on late payments and even failure to pay rent. In addition to receiving payments electronically, Specialized Property Management in Orlando has a system in place to alert us when rent payments are not received on time. This way nothing slips through the cracks. Residents who have failed to pay rent on time are immediately notified, as well as our property management team. This system triggers an automatic collections process.
Enforce the Lease Agreement
“Be friendly, but not friends.” This is a motto to live by when it comes to property management. After all, you are running a business, not a charity. This is a business that has the intent to make money and be profitable. So while you want to be polite and kind to residents, you must also maintain a professional demeanor. Whether you are a private landlord or an employee at one of the Orlando property management companies, your job is to enforce the lease agreement rules. This includes the enforcement of rent payments. Sometimes it can be difficult to hear a story from struggling tenants about why they cannot afford to pay rent this month, and while you can have and show sympathy, it is also your job to collect rent. Stay professional and uphold both ends of the lease agreement. Remember to treat all tenants equally.
Stay Educated on Laws and Regulations
Whether it’s collecting rent or filling a vacancy, landlords who stay educated on laws and regulations protect themselves from lawsuits. Rent collection must be handled carefully, especially when a tenant fails to pay rent. Nolo states that landlords and property managers in Orlando have a three day waiting period for tenants to pay rent or quit. A common misconception is that landlords need the total rent amount and the late fee payment after a Three Day Notice to Pay Rent or Quit has been delivered. However, the law states that landlords can only charge on the rent amount, excluding the late fee. Therefore, if a tenant delivers the rent payment in full within the three day period, an Orlando property management company must accept it. Failure to pay the late fee when rent has been paid in full does not count as failure to pay rent. If the Three Day Notice to Pay Rent or Quit expires and still no rent has been paid, landlords can and should move forward with filing an Unlawful Detainer. Prior to filing, please consult with your legal counsel to ensure that you are in compliance with the eviction laws. Eviction laws are very specific and must be handled carefully to stand up in court.
Keeping a professional mindset and demeanor in the thick of an Unlawful Detainer filing is important. If you are feeling angry about the situation, remind yourself to not take it personally. Keep it professional. For example, taking it personally could mean feeling so angry with your tenant that you go and change the locks on the door to the property so that the tenants cannot get in without paying you rent first. This is illegal and certainly not the answer to solving your problems with rent collection.
Understand that circumstances change for all of us. Orlando property management companies can still be compassionate towards tenants while staying professional and running a business. Landlords cannot enter the premises while an eviction is underway, unless they have reason to believe that the tenant is in harm. If you suspect that the tenant has deserted the property, consult with your legal counsel on how and when to gain entry. Follow the eviction laws and stay protected.
How the Top Orlando Property Management Company Can Help You Collect Rent Each Month
At Specialized Property Management, we have seen and dealt with just about every situation possible in the property management industry. Our professional staff has training and education on rent collection policies and laws. We have automated processes that keep the rent coming in on time each month for property investors. Protecting our clients and their investment properties is our goal. This is why we have rigorous tenant screening processes to make certain that the residents who occupy the property are qualified to pay rent each month, have a good track record with rental history, care for the property, and make on-time rent payments. For more information on how Specialized Property Management can help you with rent collections, contact us today.