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How
to Collect Rent from a Tenant
Collecting Rent from Tenants Online and Offline
Are
you a landlord collecting rent from tenants? Whether you are doing it
the traditional way
with cash or leaving rent collection on auto-pilot with online payment
methods, learn how to collect rent from a tenant quick and easy today.
How
to Make Sure that Your Tenants Pay Their Rents on Time
If you want
an easy time collecting rent from tenants, you have to take
action
even while you are signing the rental agreement. Have a good talk with
your tenants on rent collection such
as what payment methods you will be accepting and when exactly is the
due date for rent.
If you are imposing late rent charges, make sure to warn your
tenants before hand so that they will think twice before trying to get
away with late rent payments. Click
here for more details on how to collect late rent payment from a tenant.
To avoid the sticky landlord tenant issues of late rent payments,
it's a good idea to give your new and problem tenants a reminder call a
few
days before their rent is due. You can also
choose to email them if they are the type that checks their inbox
regularly.
Now
that you have set the ground rules for rent collection with your
tenants, let's learn how to collect rent from tenants online:
What are the Online
Payment Methods for Collecting Your Rent?
Nowadays
more and more landlords are turning to online payment methods
of collecting rent because it is both quick and convenient. With so
many online payment methods to choose from, the trick is knowing which
ones are right for you as a landlord.
You want a smart and automated way of collecting rent online, Buildium
is a top rated online property management program that allows your
tenants to pay you directly from their bank accounts. You can set it to
automatically charge your tenants whenever rent is due and it will
update your accounting records once rent is received.
If all you
need is a basic way to collect rent from tenants online, you
can
choose to use Paypal as well.
Paypal is free to set up but they will charge you 2.9% of the
rent money you receive. If you receive more
than $3,000 every month in your Paypal account, you will be charged
slightly lower fees.
Setting up merchants account to accept credit card payments are
usually too costly and troublesome for the average landlord so
we
suggest you avoid it unless you manage more than 50 rental properties.
What
are the Offline Methods to Collect Rent from Your Tenants?
Traditionally
there are 2 payment methods that is favored by
landlords who are collecting rent - Cash on Delivery & Checks
by Mail
Cash on delivery simply means traveling to down to your rental
property and having your tenants give you cold, hard cash. While it
takes more time and effort, this is easily the most secure and safest
way to collect rent from tenants. This method is recommended if you
live
near your rental property or you feel that your tenants are not
trustworthy.
If you live far away from your property or prefer a less hands-on
approach, then collecting rent by check may be the way to go for
you. From our personal experience, there is a simple yet effective way
to make rent collection painless and avoid any ugly landlord tenant
issues.
Another tip on how to collect rent from a tenant: Hand your
tenants a stack of stamped envelopes with your own
address on it so that they can use it to mail their checks to you. That
way they can't use excuses such as forgetting your address or stamps to
worm their way out.
If
You Want to Increase the Rent, What is the Right Way to Do it?
Firstly you
have to check if your rental agreement is a periodic tenancy or a
fixed term
tenancy because that will decide when you are allowed to
raise your rent.
If you have a periodic tenancy, you are generally
allowed to increase your rent if you give your tenants a written notice
60 to 90 days in advance. Click
here our rent increase notice if you are collecting rent from
tenants.
If your rental agreement has a fixed time period, you are usually not
allowed to raise your rent unless your contract has a phrase that
allows you to do so or you have made major improvements to your rental
property. Even if you have a clause in your lease that allows you to
raise the rent, the laws in most areas only allow you to do it every 6
to 12 months.
Now that you
have mastered the
important basics on collecting rent from tenants, it's time for you to
learn how to handle the thorny issues of late rent
payments:
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