How Should New Landlords Collect Rent From Tenants?
Everybody knows that collecting rent on time is a critical duty for any landlord. I’ll not bother you with the reasons since they are obvious. Instead, I’ll concentrate on laying down a set of steps that you can decide on whether to follow or not. Hopefully, they’ll make collecting rent from your tenants easier.
Set the Rules for Rent Collection
Like any other activity that requires cooperation from different actors, you have to set the rules from the start. But before you carve those rules in stone, consider the following points ahead of getting ready your chisel and hammer.
The number of units and distance from each other – It’ll make a big difference whether you have one or twenty rentals. Also, collecting rent from two or three tenants in the same building is entirely different from driving to locations distributed all over the city.
People skills – Do you want to interact with your tenants on a regular basis. It might be great to keep an eye on your properties, but if the situation gets tense, constant contact with your tenants might not be in the business’s best interest.
Tenants and Technology – You might think that everybody does transactions online nowadays, but you should carefully consider who your tenants are. Are they older or biased against technology? Are they paying cash?
Rent Collection Method
Now that you considered your tenants and your particular situation, it’s time to decide which collection method to use.
Online – This is by far the most convenient method of rent collection. There are plenty of applications out there that you can find with a simple web search. They are entirely free for the landlord and only a small fee for the tenant in many cases.
In-person – It’s good for keeping an eye on the ball but time-consuming and personal.
By mail – You don’t want to hear “the check is in the mail.” There is a reason why this saying is so famous. Do it at your own risk.
Dropbox – Location, location, location, is it secure and convenient for all the parties involved?
Property Manager – If your property or properties are far off, you don’t want to interact with tenants, you lack the time or accounting knowledge, this might be the right move for you. When you consider the knowledge and experience an established property management company brings to the table, the cost is well worth it. They can also provide additional services like Property Showings, Tenant Qualifying, Maintenance, Advertising, Accounting, and in worst-case scenarios, Evictions.
Check the Landlord / Tenant Laws
This one goes without saying. When contracts are part of the mix, calling a good lawyer is a must. If you are in Florida, here are a few informational links to get you started.
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