Tips: Missed rent payments
Great article I found. http://buytexasproperty.blogspot.com/2013/02/tips-for-dealing-with-missed-rent.html Every landlord or property manager has probably dealt with a tenant not paying their rent on time or missing payments altogether. Dealing with missed rent payments can warrant different actions depending on the terms of the lease. As a landlord, it is important to keep in mind that this is a business, after all. Late or missed payments will only hurt the business you are managing. In order to deal with this often-sticky situation with tenants, landlords can equip themselves with several tips to avoid the headache. Don’t Get Too Personal Landlords, especially those who live on site, can at times develop friendships with tenants. Even if this is the case, landlords need to remain firm when it comes to rent. If a tenant falls on hard times, landlords shouldn’t become too personal about the situation, letting months of late payments slide. Landlords should take a business approach when dealing with tenants and collecting their rent. Have a Policy in Place for Missed Rent Payment In order to avoid getting too personal and empathetic with tenants to the point of letting missed rent payments go, landlords need to have a policy in place for missed rent payments. A standard plan is to have it in the lease that rent is due on the 1st of the month. By the 5th of the month, late fees will be charged. By the 7th of the month, letters will begin for collection along with calls. If rent is still not paid, by the 10th of the month, landlords should post an eviction notice. By the 13th of the month, eviction filing begins. If landlords have these policies outlined in the lease, the tenant will be forced to follow them Take Payment Plan Requests with Caution Some tenants will be responsible and let landlords know that they will have trouble making their rent. Tenants might propose a payment plan where they will pay a portion of the rent and the other late portion across several months. Some people do have bad months, so landlords can weigh this option for dealing with a missed rent payment. However, they should do so with caution. Landlords can re-screen their tenants and find out if they have enough income, usually 2.5 to 3 times their rent, to pay their owed rent. As always, landlords that agree to payment plans should get the deal in writing. Keep Good Records of Tenants in Case They Bail If a tenant breaks the lease and abandons their rental, landlords should have good records of the tenant to get that money they owe. It is key to have good records, such as the tenant’s place of employment and emergency contact information, so that you can serve them with court papers if need be.