Though a single late rent payment from a tenant isn't the end of the world, a string of delinquent payments can cause myriad issues for landlords. Regardless of a renter's excuse for being late month after month, experts say property owners and managers shouldn't be passive with this behavior. Some knowledgeable industry sources recommend taking action to prevent late payments and deal with tenants who are habitually late.
Prior to any rent payment issues surfacing with residents at your property, ChoiceOfHomes.com suggests you take time and effort to ensure the tenant screening process is thorough. By spending extra energy in this process, you can assure yourself of getting only renters who are clearly capable of paying rent on time. Qualities to look for in a tenant include a solid credit score and a well-paying, stable job situation.
Candidates who don't have these two attributes may be risks for potential late rents down the line. If you don't want the headache of having one or more renters paying their rents past due date each month, the website states it's best to take the screening process seriously.
To prevent even one late rent payment from tenants, AllBusiness suggests implementing a clause in a rental lease agreement that states there will be a penalty for paying rent late. For renters who have shown a history of being delinquent with payments, the source advises owners and managers to remind these tenants when the payment due date is coming. Cutting them even a little bit of slack regarding on-time, in-full payments can lead to late payments becoming a trend, so it is best to avoid doing so.
Even if a tenant fixes their poor payment habits, Landlord.com says you should try to determine the cause for a renter's overdue payments. Sometimes, tenants are dealing with financial or personal issues, such as unemployment or a health concern. Some leniency for these renters should be allowed. An ideal way to help these renters out - and ensure you get your money - is to set up a payment schedule with them that allows them to pay you by an extended due date.
One thing Bigger Pockets states landlords should be mindful of when dealing with late rents is to remember each individual case is unique and should be handled carefully. The blog advises owners and managers take a firm stance with tenants who've been late, but also try to reason with them and come to a feasible solution.
Though many landlords tend to show some leniency for renters with one or more late payments, eventually, if the problem persists and an owner's finances start to become affected by delinquent rents, it's recommended to start the eviction process. Landlord.com suggests beginning this process as soon as one can - the sooner it begins, the sooner owners can get their money.
Many landlords may choose to serve a "pay rent or quit" notice before thinking about evicting a tenant, according to AllBusiness. However, some renters simply don't respond to this letter, along with other requests to pay rents past due, so eviction likely provides the best avenue for landlords to resolve the situation.
While evicting a renter can be a messy process, property owners must remember why they invested in their residence - to make a profit, just like any other business.
When evicting a resident, be sure to have all documentation of late payments in order, AllBusiness states, as this is the key to proving rent has been late and the tenant hasn't lived up to their end of a rental agreement.