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How to get rent payments on time
If you are a property manager or a landlord you very well know how hard it is to get your rent collection from tenants as usually agreed in the signed contract with them; As tenants happen to come up with all sorts of excuses both true and false ones for the delayed payment.
As a property manager or owner, I believe I don’t have to remind you about the money you have lost in trying to recover your rental payments.
In this article, I am going to share with you the different tips you could use to get a stable income from your rental business and also minimize the rent defaulting done by tenants.
From our various interactions with the various property managers and tenants especially in Kampala, Uganda. We have noted that one of the major ingredients in the tenant’s failure to fulfil their part of the bargain is rooted in the onboarding process.
Most Landlords or property managers do not put effort to vet tenants before they hand them the keys to their properties, they put focus mainly on the money without examining the tenant’s ability to make continuous & timely payments after the initial payment and security.
Therefore, as a property manager, you need to try as much as possible to vet the ability of your prospects to pay the rent of the agreed period in the contract. When that is done, then it will be much easier to employ some of the various tips below to ensure stable rent collection.
1. Tenant screening
This is the first step to getting the rent paid on time. It involves the process of thoroughly screening prospective tenants including running a credit check and background report, verifying employment and income, and speaking with former landlords to learn whether or not a tenant paid the rent on time or is capable of paying rent on time.
2. Draft a Memorandum of Understanding with the Tenant
To clearly state the rules regarding payments like the expected date for the tenant to make the rent payment, stating the effects of the late payment and also clearly provide the different acceptable payment methods.
3. Send polite payment reminders in time;
As simple as this sound, Douglas Ssebagala of Rabbi Property Management Company say this is one of his magic trick for getting his tenants to pay their rent on time and feeling cared for. This can be as simple as a 30-second phone call, a text message or a WhatsApp message.
He continues to say that some of his tenants have come up to appreciate this gesture as it reminds them to budget for the payment before other demanding expenses like health, and school fees take up their money.
You can as well issue invoices to sign the due payments, If the payment is to be done in April, it would be better to send the invoice before the 31st of March.
4. Respond to tenant’s issues on time
If tenants raise their issues to you as a property manager or landlord and you are not always available to work/respond to them; this will work against you as most of them will feel like they are not getting their money’s worth and some will choose to frustrate you by not paying in time or use it as a way to get you to work on their issues.
Therefore, always try to respond to your tenant’s issues and provide appropriate working solutions to their problems.
3. Late payment penalties
As we all know, some people will only act on the payment only if there is a penalty for late payments. Therefore, you should consider clearly informing your tenant about the effects of their late payment such as extra money payment which can be a flat amount or a percentage of the monthly payment.
5. Offer alternative payment options
In a country like Uganda, we have multiple payment options like Mobile Money for different operators or Bank services.
I personally had a landlord whose payment method of choice was very hard to find. I had to always take a journey of over 15 km just to deposit my rent payment yet there were various options in the neighbourhood he was not using and because of this discomfort, there are times I would fail to make payment in time.
Therefore, It’s important that you consider giving your tenants readily available payment methods so that they are able to pay you on time.
I believe with the above-mentioned tips you should be able to get better your rent collections in time. However, it’s also important to remember that you are dealing with people, so how you treat them affects how they respond to what you want. Customer service and care are very key to the performance of your business.
If you do have some challenges managing your rental business, don’t hesitate to reach out to Rentos a cloud-based property management solution which can help you manage your estate, and tenants and easily generate various useful reports.