Luckily for Colorado landlords, the state’s average on-time rent payment rate sits at 97%. This is above the national average of 94.5%. Even if your tenants have a good history, it’s best to take steps to avoid problems before they occur.
Here are four of the most common rent collection mistakes that you need to avoid.
Consistency is key when it comes to managing rent collection. You should have a clear policy regarding how much rent is due, when, where, and how it should be paid.
All of this information should be clearly laid out in your lease. In addition, you should be clear about grace periods, late fees, and what happens if there is a bounced check.
However, it’s also important that you enforce these rules fairly and consistently. Unfortunately, if you become lax in this, a tenant may decide they don’t need to pay on time.
You should also be sure to be consistent in keeping records of payments. If a tenant does have problems paying rent, you will need these records to take legal action or report non-payment to a credit agency.
2. Not Charging Late Fees
Some people feel late fees are too tough on their tenants. However, they are one of the most powerful ways you can help ensure your tenants pay rent on time.
Most tenants want to avoid paying these, meaning they will avoid tardiness if at all possible. In addition, late fees can help show that you are serious with your position as a landlord.
3. Eviction Mistakes
One of the most common rent collection myths is that if a tenant is not paying rent you should jump straight to eviction. However, many times there is a reason that they didn’t pay.
Make sure to discuss the reason in a calm and understanding manner first. It may have been an honest mistake that can be cleared up quickly.
If you do think you need to evict a tenant, make sure you fully understand the laws regarding eviction in your state. Many states require that you allow the tenant to pay back the rent before moving forward with an eviction.
If you do file an eviction, there is a legal process involved. You need to make sure you follow all related laws during this process.
4. Not Getting Help
You can try to manage rent collection yourself. But if you take away one piece of rent collection advice today, it’s to hire professional help. Doing so will make everything easier.
A property management service will be able to accept and record payments. They can help make sure you are following all rules and laws along the way. They can even deal with tenant communication.
Working with a professional can ensure everything is done in the best way possible.
Follow This Rent Collection Guide
Unfortunately collecting rent can be a somewhat complicated task for landlords. This can lead to you making rent collection mistakes that could lead you to lose money and have an unpleasant relationship with your tenants. Luckily, with these rent collection tips and help from a trusted property manager, you can be on your way to easier, more consistent rent payments.
Contact Mavi Unlimited Property Management to get started today!