5 Property Management Tips for Getting Rent Payment on Time

by Jennifer Minge

The most important job of a property manager is the timely collection of rental payments. Investors expect rental income will cover their mortgage payment and provide monthly positive cash flow. The collection of rent is critical to the success of your investment property.

The tenant’s lease should clearly specify the amount of rent that is due each month, a grace period if any, the penalty for late payment and the consequences of non payment. The property manager should clearly review these items with all tenants before giving them the keys to the unit.

Here are 5 tips that property managers use to collect rent on time:

1) When a new tenant moves into the property, provide them with a six month supply of self-addressed-stamped envelopes. The date the rent is due is written on each envelope. Instead of providing SASE, on the 20th of each month send an invoice to the tenant showing their rent amount and the date that it is due. Include a SASE with the invoice.

2) Rents are usually due on the first, but sometimes the property owner will provide a grace period before late charges are incurred. If the rent is not paid at the end of the grace period, immediately mail an invoice to the tenant. The invoice should indicate that any rent payments should include any late fees. If possible, hand deliver this invoice to the tenant the day after the end of the grace period. If the tenant is not home, leave a copy on their door.

3) As a follow up to sending an invoice, call the tenant immediately asking the status of the rent payment. The tenant should be called every day until payment is made.

4) Charge a late fee in your lease. If the tenant has not paid be a specified date, they should be charged a late fee. This late fee should never be waived. If tenant realize that management is serious about collecting late fees, they will have a tendency to start paying on time.

5) All leases should specify a date that management will file for eviction. This date should be early in the month. If the tenant has not paid, management should immediately file for eviction.

The property manager is responsible for enforcing the terms of the rental lease and they should never waive or fail to collect any penalties. The efficiency of the property manager in collecting rent has a direct impact on the success of your investment property. Any manager who fails in collecting rent in a timely manner should be immediately replaced.