Tips for Collecting Early and On-Time Rent Payments
by SherRon Marcek | PayRent.com
Late rent payments are a costly and pesky problem for many landlords. Aside from adding late fees, which may further delay payment, here are some positive strategies to help you collect rent on-time and keep you from pulling out your hair.
1-Report Payments to Credit Bureaus
Reporting rent payments will not only boost on-time payments, but it will also reward good tenants who are trying to improve their credit scores. There are multiple services you can use to report payments to the credit bureaus, such as Rental Kharma or Rent Reporters.
2- Make rent payments automatic
Eliminate the human error aspect of getting paid on time and have your renters signup for automatic payments. In a recent renter’s survey, PayRent found that 4 out of 10 renters actually prefer to automatically schedule their rent payments. They cited convenience as their primary motivator. To get more renters on-board, you could offer a discount for enrollment.
3- Accept credit card payments
Since rent due dates and paychecks don’t always line up the availability of money can delay rent payments. Give your tenant some wiggle room by allowing them to pay rent with a credit card. You’ll collect rent on-time and they won’t have to worry about expensive late fees or bouncing a check.
4. Offer discounts for paying early.
While it is common practice, and wise, to punish late payments by slapping on a late fee, it isn’t your only option. Try some positive reinforcement and reward early payments with a discount. For instance, rent paid five days before the due date could receive a 5% discount. You can tailor this however you’d like as long as the reward is enough to motivate your renter. This strategy moves up the rent due date in your tenant’s mind. Instead of thinking that rent is due on the 1st, they’ll make every effort to get it to you by the 25th.
5. Make it easier to pay rent
The fewer steps your renter has to complete to make their payment, the better. It may take days for them to write a check or purchase a cashier’s check, address an envelope and drop it off.. Simplify the process by accepting online payments. Many rent payment platforms offer due date reminders for tenants and store their payment information to make future rent payments even easier.
6. Cap Rent Increases
Collect rent on time and encourage long-term tenants by agreeing to not raise the rent at the end of the lease if all payments are made early or on time.