Learn How to Handle Tenants Who Pay Late By Alvin Clavines

by Joe Thomas on July 27, 2010

You own and manage your own investment property, but your tenant had not yet paid the rent. Should you call? Should you email? Should you visit the tenant? What should you do if you have tenants who pay late? Well, the first thing that you should do is not to panic. One of the toughest problems that a rental property owner may have is collecting rent from a late-paying tenant – or, worst, a tenant who does not pay at all. As an investor and landlord, you should be ready to encounter such tenants from time to time. Bad payers are real pain in the neck for all landlords but there are several ways to deal with the problem.

It may not be a bad idea to offer discount for on-time payments. This may encourage tenants to be on time when they pay their rent. On the other hand, late fees should apply on late payments. Being in control may prompt tenants to pay on time, every time. Some late payments happen not because they intend to do it but because the tenant simply forgot. In this case, consider two things. One is to issue a notice of non-payment of rent immediately as the rent is late. Tenants tend to pay their cell phone use, credit card, or whatever when they receive the bills each month. This can also work on their rent. Another is to suggest an automatic payment plan. This can be done by setting up automatic payments by direct withdrawal or by credit card. Again, this set up is assumed good intentions on the side of the tenant.

What should you do with constant late payers? If the tenant is a consistent late payer, then you should act consistently as well. Always apply the same late payment fees and file rent invoices for every late paying tenant or those who have not paid at all. Showing consistency in your actions makes a strong precedent in case you have to defend your actions in court or consider evicting the tenant. Being consistent in your actions also gives the impression that you are fair to all tenants and at the same time firm.

A tenant, whose lateness gets worse and worse every month, even with the late fees and issues about late payments, indicates that he has little regard for your authority. Then, you have to ask them to move out. Talk the tenant into taking a voluntary eviction. Court-ordered evictions require a lot of money and time. In case the tenant refuses to leave the property, you need to get this court approved eviction paper.

Like they say, the best way for getting tenants to pay their rent on time is prevention. At the beginning, do a little investigation on the applying tenant. Occasional late payment is unusual if you have applied the proper background checks. You can run each applicant’s credit report and contact the landlord before their present one. You may also want to verify the applicant’s employment record. Ask for a recent pay stub for verification of his employment status.

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