There is nothing worse for a property manager than having a tenant who has not paid their rent. It can lead to all kinds of legal problems and the unpleasant task of eviction. As a landlord with a rental portfolio, non-payment of rent from enough renters can lead to serious financial issues. Here's how to be ready to tackle non-paying tenants.
Be Prepared for Trouble
When a new tenant is on their way, there is no guarantee that things will run smoothly. They may turn into the tenant from hell with no intention of paying rent. Then again, they may have very genuine reasons for not paying, such as an illness or losing their job. Doing a financial check and taking references before renting a property are some ways of checking out a tenant.
Make sure a deposit has been collected before the tenant occupies the space, this way, you should be able to avoid issues if rent is delayed by a few weeks, as you already have their deposit on hand. Within the lease, specify when rent is expected and how long the grace period may be, if you choose to have one. Be very clear with your new tenants when you expect payment and the consequences of not paying on time. Regular maintenance checks are a good way of checking out the property and looking for signs of neglect which can lead to non payment.
Check the Payment
On the due date, check your account to ensure that the rent has been received. If the rent is not in your account, a polite phone call or email to the tenant should act as a reminder. It may be that the tenant has changed a bank card or account recently and has not updated their records. This issue is easily solved and often takes a quick phone call.
Any evasive behavior at this stage should get alarm bells ringing in your head. Is the tenant ill or have they lost their job suddenly? If the tenant is usually reliable, it may be worth working with them on a payment plan or checking if they are entitled to a welfare grant. Helping them and being proactive, especially if they are ill, will avoid unpleasantness at a later stage. Don't forget that anyone can face a short term crisis due to illness or job loss so do try to see the positive side of the issue. Keep records of your actions so that if the issue is not resolved a court can see that you have tried to be tolerant and not acted in an unreasonable way towards the tenant.
Proceeding with a Non-Payment Issue
Have a clear procedure in place for when non-payment occurs and stick to it. Contact the tenant and then back up the call in writing. Keeping people on a short lease helps with eviction but if you find yourself in that position, make sure that you have all the legal processes in place. Don't forget to change the locks. Non-payment from a tenant can happen at any time and filling an apartment can sometimes take weeks, especially if it has been damaged. Always ensure you have six months worth of funds to pay bills and mortgages, should the payments stop from the tenant. The last thing you need is for your property to be repossessed because of the actions of a non-paying tenant.
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