When you decided to lease out a property, late payments were probably something you were planning to avoid. The reality is that late payments are part of being a landlord. Whether it's a careless tenant or one facing an extreme financial crisis, a tenant may pay late. Since you can't avoid this situation, it's a good idea to learn how to handle this challenge when faced with it.
Keep Your Business Hat On
As painful as it might be to accept, you are at the mercy of your tenants when it comes to their rental payments. Not until you go through a lengthy legal process can you really force them to pay. When discussing a late payment concern, always keep your business hat on.
Don't take it personally. Doing so can cause you to get emotional, and before you know it, a confrontation has ensued. At this point, the chance of the tenant paying can get even slimmer.
File Right Away
Begin the eviction process one business day after the rent is deemed to be late; don't wait. Depending on where your property is this could include posting a notice to quit letter on the door or filing with the court. Whatever it is, you want to do it right away. First, in the event you have a tenant who has no intention of paying, you can immediately start the process to get them out.
However, more importantly, you send a message. Most late payers probably have intentions to pay you, but they will hold off as long as you allow them to. By moving swiftly, you show that you consider this to be a serious and important matter that they have to address right away.
Be Cautious with Partial Payments
In some cases, a tenant might request that you allow them to make partial payments toward their rent until they are paid in full. Travel down this road with extreme caution. This would seem like a great way to collect your money, but in some states partial payments are actually the opposite.
Should you have to move forward with an eviction, these partial payments could serve as a road block. Any acceptance on your part of anything less than the full amount due is a pretty much guaranteed way to lose later. For example, some states have laws stipulating if you accept partial payment, you waive your right to the full monthly rent amount.
Uncomfortable with This Process?
If you're uncomfortable dealing with late payments on your own, a property management firm like Cambridge Companies can help. If your property is under contract, the management firm will oversee the rent collection process from start to finish so that you don't have to.
When it comes to late rental payments, it's best to keep calm. Whether you get the tenant out of your property or you're able to collect your rent, it will all work out for the better in the end.