Collecting rent is necessary to keep your real estate investment business thriving. However, it can be tricky for the most seasoned investors to execute properly. Here are the 5 most effective strategies we have found when it comes to collecting in a timely fashion:
- Have a thorough screening process in place: Find tenants that have a pattern of timely payments. Verify not the credit score but instead the trade lines that display the monthly check mark year over year of consistent monthly payments.
- Set up a strong reminder system: People need reminders & you need rent. It is worth sending that text/email and there are plenty of applications out there to automate this for you.
- Offer flexibility: People need options. The more ways people can pay you. The likelier you are to get paid. There are options from Chase Quick Pay, Pay Near Me, and Venmo. Know the risks associated with each so you can set the parameters on the flexibility, so it still falls within the date and grace period as defined by the lease.
- Offer a carrot & a stick program: People like incentives. Rewards for paying on time can be crucial to your success. Offer a rent reporting system to the credit bureau that you might contribute to after 12 timely payments.
- Follow your legal system: Be proactive of advising tenant’s of protocol when payments aren’t made then enforce these rules if the time comes. The easiest way to make sure these situations don’t become a habit is staying on top of it right away.
These are just a brief description of the 5 most effective strategies to collecting rent. If you’d like a free copy of the e-book, click here to request one!