March 28

How to pull a tenant into line when they pay rent late

Good investment property management tactics keep rental income flowing

Investment property management should help you get a great tenant, maintain them and your property, and make sure the tenant pays the rent on time. Unfortunately, there’s always the possibility that your tenant will be late paying the rent or fall behind in rental payments.
A tenant who is continually late paying or behind in their rental payments is an issue that needs to be dealt with quickly. If you don’t do so, you risk:

  • The tenant falling further behind and unable to catch up
  • Extra costs because of uncovered mortgage payments
  • Greater difficulty in communicating with the tenant

In this article, we’ll look at seven tactics that can be used to keep the rental payments flowing as they should.

1.    If the tenant is late paying, tell them immediately

As soon as a tenant is late paying, you’ve got to let them know. It will reinforce that you’re on top of the situation.
It also shows that you care – you don’t know why they are late. It could be that their bank has made a mistake, and if this is the case, you can bet your bottom dollar that your tenant will want to know.
Our systems alert tenants about late payments by automatically sending SMS and emails. It creates a paper trail WHICH is easy to prove if you ever need to go to court to evict and retrieve unpaid rent.

2.    Speak to the tenant

It’s also important to speak to the tenant, and discover why their rental payment is late. It could be that they have forgotten – though if the payment is on direct payment, then this shouldn’t be the case. However, they could have new bank details, and the direct payment hasn’t been updated. Speaking to them early will remind them to make sure their bank updates payment details.
Bank holidays can also play havoc with payments, or employers may be late paying your tenant’s wages.
Our experience is that when rental payments are late, there is usually a valid reason. But you must cover all the bases and ensure the tenant isn’t spending your money elsewhere.

3.    Send reminders and record them

Every three days, send a reminder – again, by SMS and email. And again, keep a paper trail.
If the rent goes unpaid for a week, then it’s time to start speaking to the tenant more regularly. Ask them:

  • Why they haven’t paid the rent
  • When they plan to pay it

If the reason is that they have lost their job, or their personal circumstances have changed, it’s time to be on high alert. Often the tenant will find a new job quickly, but you can’t afford to let them not pay their rent in the meantime.

4.    One late payment might be forgiven

When you speak to your tenant, you’ve got to be objective. Don’t get drawn into a conversation in which they can play on your goodwill. It’s difficult not to feel for a tenant who has fallen on tough times – especially if they have always been a great tenant, looked after your property, and paid rent on time.
Remember, though; you have far more at stake:

  • The tenant could be evicted for non-payment
  • You could lose your investment

The best strategy is to maintain a zero-tolerance policy.

5.    Keep everything in writing

Whatever communication you have with the tenant, put it in writing, too. We prefer email, linking into our payments systems.

6.    Offer a repayment plan

If your tenant has been a good tenant to this point, you may wish to help them by offering a repayment plan. It shows you care and value their tenancy. However, make sure that it’s in writing and that the new repayments are made when the tenant has agreed to do so.
For example, if the tenant has changed jobs and must work a month in hand, you might agree to accept a few smaller weekly payments to catch up on the one-month late payment in addition to the normal rental amount in following months.
If a repayment plan is offered, make sure that the expected payments are dated, and that any late payment will constitute a break of the agreement and all bets are off.

7.    Accept a credit card payment

Finally, it may be worth offering the option for the tenant to pay by credit card. After all, they’ll get up to 56 days to pay without incurring interest. You’ve got your bills and mortgage to pay.
All these tactics are designed to keep good tenants in place and make sure your bank balance doesn’t suffer. However, once payment is late, whatever the quality of the tenant, it’s a warning sign to remain extra vigilant. Eviction may be a course of action that is unavoidable.
Contact Ezytrac today on+44  1522  503  717, and discover how our investment property management service will help you protect your buy-to-let against late payments and rental defaults.
Robert Smith


investment property management, landlord and tenant, nightmare tenants, rental disputes, rental income, residential tenants

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