You've taken a smart step to purchase a rental property in Fort Lauderdale, FL. You've also marketed the property effectively and found tenants. You're now looking forward to catching a breather as you wait for the month to pass and collect your first rent checks.
Rent collection is an exciting time for every landlord, but it can also be a source of pain and stress. Observe the following best practices for collecting rent and you'll have an easy time.
1. Have a Clear Rent Payment Policy
Ordinarily, rent is due on the first day of a new month. However, if you've not specified a date, don't assume your tenants will make the payment on or before the first day of the month. Some landlords offer grace periods, but this can vary.
Having a clear rent policy and including it in the lease agreement is a good rent collection practice. As a new tenant moves into the property, they'll already know when the rent is due.
What happens if a tenant fails to pay on the due date? This is why you need a late fee policy. Beyond the grace period, you can levy a fine, but ensure it doesn't violate Florida's late rent payment laws.
2. Offer Multiple Rent Payment Methods
Cash, checks, and money orders are still the primary methods for paying rent, accounting for about 80% of all payments. In 2024, a time when digital payments are accepted everywhere, it's unbelievable to think that most landlords are collecting rent the traditional way.
It's time to bring your rental business to the new age by offering digital payment methods in addition to traditional ones. Especially if most of your tenants are millennials or younger, you'd be doing them a lot of good by accepting digital payments.
Offering multiple rent payment methods makes life more convenient for your tenants. They no longer have to mail you checks and money orders because they can go online and make an electronic payment from wherever they're in the world.
3. Automate Rent Collection
Along with enabling tenants to make digital payments, you can go a step further and automate the whole process. In today's world, you should be sending reminders to tenants or preparing rent receipts. Accounting software can do that for you.
All you need to know is how to deploy the software so that it automates rent collection. An effective approach is to build a tenant portal with integrated accounting features.
Tenants can log into the portal, see their bills, and make payments. The software will keep track of payments, issue receipts to those who have paid, and send reminders to those with balances.
Rent Collection Shouldn't Give You Grief
Rent collection, just like collecting debt, isn't always a simple task. However, by having a clear rent payment policy, offering multiple payment methods, and automating the process, you will eliminate most bottlenecks.
Alternatively, you can hire a full-service property management company and let them do the heavy lifting. Metro Residential LLC is one such company.
Based in Fort Lauderdale, our locally owned and independently operated company has been providing property management services since 1996. We have provided aggressive financial results to thousands of clients, and you can be one of them.
Call us to get started!