It’s the first of the month. The money flows in, but you know a large chunk of it is going to flow back out since you have bills to pay just like everyone else. There’s the mortgage on your properties, the taxes, the resident in #209 needs a new fridge…
This month, however, not everyone paid. You hate it when this happens. You both signed an apartment rental contract stating that if you offered X they would pay Y. Since you are holding up your end of the contract you would hope they would hold up theirs. Now you have to be the bad guy, badgering them for rent.
Late rent is a problem that many property owners face with one resident or another and how to deal with residents who aren’t paying rent isn’t always clear-cut. Sorry to say it never will be since every resident is different and their reasons for delinquent rent can be just as varied. Here are some popular excuses residents offer-
I lost my job
I got a flat tire/broke my arm/some other unexpected expense
If I pay you I can’t pay my other bills
We just bought a new car
I mailed my rent so you should have gotten it
There’s a problem with my bank.
I’ve had so much going on this month, I completely forgot!
There really isn’t a way to handle each of these situations with a cut-and-dry ‘how to handle late rent’ formula. What we have for you is a list of different options to help you figure out what to do with the various excuses residents will use.
Send a friendly reminder notice before rent is due that the date is coming up. Online property management software will usually do this for you.
Follow through with the lease agreement and charge the late fee.
Send a late rent notice. You could start with indirect methods like text, email, or a notice posted on their door. Then follow up with a more direct method like calling or meeting with them in person.
Try to balance between being flexible and humane but also serious about running your business effectively.
Learn to discern if this is definitely a one-time issue or will be an ongoing problem.
Consider offering prizes which could be effective with younger residents. The prize could be something simple for those who go one year with no late payments. If someone is late once and you think they need some sort of incentive, you could offer a smaller prize if they pay rent on time for six months.
For those accumulating late fees you could have their next payment cover the fees and not rent until they are all paid off. You can also use the security deposit to cover late fees.
Offer to pay them to leave if you worry this might spiral into a bad situation.
Come up with a payment plan for those who contact you first knowing that rent will be late in the upcoming month.
Pick and choose, it’s up to you. No matter what, though, be persistent. You won’t get your money otherwise.
