When you own Grand Rapids rental property, your success typically all comes down to on-time rent collection.
Rent collection isn’t always as easy as it should be. Even well-screened tenants can hit a difficult patch in their financial lives. If they have to deal with a divorce, a job loss, or even an unexpected car repair, they might be thrown into financial chaos, and that good tenant will find he or she cannot pay rent on time.
At Short South Realty Group, we have a pretty great record of on-time payments. It’s rare that we have to collect late payments from our tenants, and evictions almost never happen. If you’re struggling to get your rent paid on time, talk to a Grand Rapids property manager. It does not have to be a source of frustration for you; it can be automated and consistent.
We’re sharing some of our best tips, and we invite you to leverage our resources and experience to ensure your rent is paid when it should be.
Set Expectations and Establish Rent Collection Policies
At Short South Realty Group, we set expectations with tenants early, communicating our firm but fair rent policies up front. Your lease should be explicit in what tenants are expected to do. Put together a rent collection policy that reflects:
- When rent is due (which day of the month, and what if it falls on a weekend or holiday?)
- How much rent needs to be paid (including pet fees, utilities, etc.)
- How tenants should pay (check or money order or online)
It’s also important to include any grace periods and late penalties that might apply. When you’re meeting with your tenants to sign the lease or go over its particulars, have an open and transparent discussion about the rent. Let them know that you take it seriously and you will follow the terms of the lease when it’s late.
When your tenants know what you expect of them, they have an easier time meeting those expectations. Every tenant who moves into your property should understand his or her responsibilities in terms of rental payments.
Enforcing your rent collection policy is just as important as establishing it. If rent comes in late, make sure you charge any late fees that you have included in your lease. It’s important not to be consistent. Let your tenants know that they will be held accountable when rent isn’t paid on time.
Allow Electronic and Online Payments
We live in an online world, and the tenants in your Grand Rapids rental property expect to pay for just about everything electronically. Very few people write out paper checks anymore, and you want to make sure you’re making it easy for tenants to rent from you. Allowing tenants to pay online will help you collect rent faster because it’s efficient and convenient. There’s less of a chance that those tenants will forget to pay or pay late.
At Short South Realty Group, we rely on our innovative, technology-driven platform to collect online rent payments. This has been a huge benefit to our owners and our tenants. Residents can easily log into their tenant portal and pay rent online. Funds are then electronically deposited into the owner’s account via ACH.
With electronic and online rental payments, tenants can increase their security by setting up regularly recurring rental payments. When they do this, rent automatically comes out of their bank account on the first of every month. It’s the most efficient way to avoid late fees and rental collections. If you don’t have property management software that allows you to collect and track online rental payments, make sure you have a way to let tenants pay electronically. It will save you both a lot of headaches and ensure you receive your rent when it’s due.
Be Flexible with Other Payment Options
Most tenants want to pay online, but not all tenants will prefer this payment method.
Maybe you have some tenants who just aren’t comfortable with online payments and they prefer to write a check. Or, maybe money orders work best for tenants who are cashing a paycheck and turning it right into a rental payment.
When you have tenants who want to mail a check or money order to you, make sure to remind them that they’ll need to leave a few extra days for mail delivery. So if rent is due on the first of the month, to be safe, they’ll want to mail their check by the 25th of the previous month.
It doesn’t happen often, but you can also accept these payment methods in person. We’re available in the office when tenants want to drop off their payments to us. With a personal check, you’ll need to wait for it to clear before you can document that the tenant’s account is current. Put some policies into place that cover returned check fees.
What about when your tenants want to pay in cash? This can be risky. You don’t want to have a large amount of cash on hand, and you’ll always want to write out a receipt to your tenants when they hand over cash to pay rent.
Cash payments can be risky for you and your tenant, so we don’t generally recommend them. You never want to accept cash through the mail. Even with a receipt, cash rent payments are difficult to document and they’re easily disputed. If you still want to offer cash payments to tenants, use a third party. Several convenience stores, department stores, and cash payment locations will accept the cash payment from your tenant, issue a receipt, and then deposit funds electronically into your linked account.
Grand Rapids Property Management
The safest, easiest, and most effective way to collect rent on time is by working with a Grand Rapids property management company.
You won’t be the point of contact, and you also won’t be the person who is chasing down late rent if it doesn’t come in on time.
We have the online payment platforms that tenants find convenient, and we also have the screening, rent collection, and lease enforcement processes in place that ensure you get on-time payments. We also work hard to screen tenants carefully and develop positive, professional tenant relationships.
Contact us at Short South Realty Group, and let us collect the rent for you.