Any experienced landlord will attest to the fact that having tenants who don’t pay rent on time is a time consuming hassle.
Not receiving rent on time can put a dent in your cash flow and damage your relationship with your tenants, so it’s important to take steps to ensure rent is always collected in an efficient manner. However, this can be easier said than done – especially if you’re a landlord with multiple properties. So what can be done to make things easier?
Here are some things you can consider when welcoming new tenants to avoid any issues:
Make the rent arrangements clear
Ensure the terms of rent payment and collection are clearly outlined in the tenancy agreement, including things such as the amount due, date, and method of collection. It’s important to have this in writing and signed by both parties in the event any late or non-payment should occur and a dispute arises.
Arrange a direct debit
Online bank transfers are swift and secure, and so you may wish to have your tenant set up a direct debit or standing order to ensure the payment is automatically processed each month. This saves time as well as paperwork, as the details of the transfer will be available on your statements which can be useful for bookkeeping.
Arrange an online portal payment
There are some purpose-built sites that enable tenants to log on and pay rent through a specific portal, which can make things much easier than having to deal with collections. If you have many properties, an HMO or student housing (the latter of which the rent may be split multiple ways), having a system like this in place can make things easier.
Instruct a property manager
Many letting and property management companies will handle things like rent collection on behalf of landlords, which can be a big time saver. Whether you want to opt for this option will depend on things such as your desired level of involvement with managing your property/properties, and your cash flow each month, as there are fees for this service to consider.
Be flexible with payment methods where possible
It may be that tenants have encountered an unexpected bill or issue, and are looking for alternative ways to pay that month. In some cases, you might have tenants request to pay rent with a credit card – you will incur fees in accepting payment this way, but if this is the only option, it may be better to be accommodating on a one-off basis than not receive rent at all. Of course, this will always depend on your specific circumstances. With that said, you should never accept cash, as there is no way of tracing this transaction and can leave you vulnerable in the event of a dispute.
There are a number of ways to collect rent in a safe manner, such as through a direct bank transfer, debit or credit card payment, or a portal that allows tenants to pay rent online. However you choose to collect rent, it’s important to make sure this is clear to tenants at the beginning of every tenancy to lower the risk of any disputes or late payments occurring.