As a landlord you’re at an advantage as a homeowner because you can use rental income as a major way to make mortgage payments each month. But a major part of being a landlord is collecting timely payments from your tenants and there are times when they don’t pay they way they should. It’s important that you remain assertive in collecting your rent while still showing respect and compassion during tenants’ financial emergencies. Before you rent your home out to a tenant you should inquire about his income and you need to check his references. Also do a background check on his credit history and see if he has a criminal record.
One way to effectively collect rent is to ask the tenant to deposit their rent into your PayPal account, and by doing this it ensures that you’ll receive your money immediately and without the hassle. Another thing you can do ask the tenant to set up a direct deposit account so he can put part of his check into your checking account. If you have a website for your rental property you can have the tenant pay his rent online with a check or credit card. This is an efficient way to collect rent.
Another thing you should do is research the local and state laws regarding the rights and responsibilities of landlords and tenants. You can do this by reading local lawyers’ websites and click on links such “Renters’ Responsibilities and Rights” or “About Renters and Landlords”. When you rent out your home to a tenant it’s important that you explain your rights and duties as the landlord and include these clearly in the contract. Also give him a copy of the rental contract for his records.
Another way to effectively collect rent is to offer the tenant a discount if he pays the rent a few weeks before the due date because this creates an incentive for the tenant to pay rent on time. And if you can afford to do so, you can decrease the amount of rent if your tenant experienced a setback such as a job loss or decrease in his salary. This lets the tenant know you have compassion and it will motivate him to remain as a tenant because of your generosity.
If your tenant has been consistently late with paying rent, mail him a polite letter stating that you’re concerned about how the tenant hasn’t been making payments, and that when he does this it makes it harder for you to pay the mortgage. Also mention that if this continues you will begin the eviction process. Another thing you can do is call the tenant and arrange for a meeting.
When seeking to collect your rent, you always want to maintain a positive attitude with the tenant and never belittle his character in writing or during meetings with him. During holidays send a greeting card to your tenant and send him a small gift as your way of appreciating his service .