Strict Rent Collection Policy for Tenants Leads to Effective Management
One of the most difficult aspects of property management is establishing a structure for rent collection and not only implementing the policies but sticking to them. We have found in instances whereby you have strict policy and procedures for your tenants regarding rent collection, you are able to manage the property more effectively and increase your returns.
Here is our rent collection policy and it has served us and our owners very well.
Any tenants who do not pay by the 3rd day should be given a 3 days’ notice. Depending upon the leases but no later than the 4th day of the month by 5pm.
3 Day Notices are posted if no rent is received so that you can immediately file eviction by the 8th of the month. During the 3 Day notice period, you should spend that time negotiating with the tenants that have not yet paid and obtain 3 things:
(1) see why they are not paying the rent
(2) when they are willing to pay by – the date
(3) how much they are going to be paying.
If no agreement is reached during the 3 day notice period for a payment plan, see how much the tenant is willing take to have them move out. You can pay an attorney to file an Unlawful Detainer (Eviction) action or you can give your non-paying tenant some money to move out. Often times it is cheaper to give to the tenant directly. Especially, if they leave quickly so you can renovate the unit and start marketing it again to more qualified and quality tenants.
If the tenants do not accept your offers to negotiate a payment plan or to leave, start the eviction immediately.