Apr 09
5
One of the toughest things to deal with as a rental property owner is collecting rent from a tenant who pays late – or, worse, doesn’t pay at all! When we were just starting out as real estate investors, my husband and I lost nearly $5,000 in unpaid rent and filing fees in an effort to evict one non-paying tenant. It was a nightmare.
Every state and province has different Landlord-Tenant Statutes, so it’s important to familiarize yourself with your local laws. Meanwhile, here’s some general advice:
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1. Act immediately. Issue a non-payment of rent notice as soon as the rent is late. Keep records of every notice.
2. Act consistently. Always charge the same late payment fees and file non-payment notices for every tenant who pays late or not at all. Consistent actions create a strong precedent should you ever have to defend your actions in court or try to evict a tenant. It also shows tenants that you are fair, but firm.
3. Move them out. If all else fails, try to negotiate a voluntary move out. Court-ordered evictions are expensive and time-consuming – but, if the tenant refuses to leave, you have no choice but to go through the process.
That said, the best cure for getting tenants to pay their rent on time is prevention!
Put some effort into finding and keeping good tenants, and you’ll find that most of your tenant troubles go away. Now, we follow a strict process for finding and screening tenants:
1. Show the property in good condition. If it doesn’t show well with the existing tenants living in it, wait until they move out. Good tenants have choices, and if the property doesn’t look attractive, why would they want to rent it?
2. Price the unit slightly below the market rate. $15 – 20 per month below competing units will attract more applications.
3. Run each applicant’s credit report and call their previous landlord – the landlord before their current one. If they have caused problems, their current landlord could be anxious to get rid of them and may not be truthful.
4. Verify the applicant’s employment. We usually ask for a recent pay stub and call the company to verify that they hold the position they claim.
(Adapted from articles written by Julie Broad for Early to Rise)
