Collecting rent from your tenants each month is a vital part of being a successful landlord. It can also be the most difficult part of being a landlord if you don’t know what you’re doing.
After all, when your tenants pay on time each month, you continue to rake in a steady monthly income. But if your tenants fail to pay on time – or at all – you might find yourself not wanting to be a landlord anymore.
It’s your tenant’s job to pay their rent each month. But how you or your Alpharetta property management collect makes a big difference in how that process unfolds each month.
If you’re looking for ways to manage your monthly cash flow and give your tenants an easy way to pay, keep reading.
We’ve got the most effective ways to collect rent each month, making it as easy as possible for your tenants to pay on time.
How to Collect Rent from Your Alpharetta Tenants
There are several ways to collect rent from your Alpharetta tenants. And, no matter which method you choose, any one of them will help make it easy for tenants to pay.
1. Collect in Person
If you have the time or desire to collect rent from your tenants in person, by all means, do it. In fact, going to your rental property to collect rent gives you the chance to check up on your property’s condition. This allows you to ensure your tenants are fulfilling their obligations and caring for your property.
There are a few downsides to self-managing your rental property and collecting rent in person each month:
- You have to disrupt your tenant’s life each month by showing up at their front door to collect
- If you have more than one property, you’ll spend a lot of time collecting rent from tenants
- You may become a target for thieves that catch onto your monthly routine and try to steal those rent checks
Though collecting rent in person is a good strategy, this method is not the best for most landlords. In fact, unless you feel that collecting rent from your tenants is going to be a problem each month, you should try another way.
2. Use a Drop Box
If collecting rent from your tenants in person isn’t appealing, you can use the drop box method instead:
- Property Drop Box. Install a locked drop box on your rental property that tenants can place their rent check into. This eliminates the need for you to have to bother your tenants each month. It does not, however, make things easier on you if you have more than one rental property.
- Property Management Company Drop Box. If your Alpharetta property management company has a drop box, you can request tenants drop off their rent there each month. This ensures your property manager receives the rent and records the payment. It also saves you the time of having to physically collect rent each month.
While the drop box method is more convenient than collecting rent in person, you must make sure to check the drop boxes regularly.
Part of running a successful rental property business is making sure your tenants pay rent on time each month. If you fail to check the box on time, you may mistake an on-time payment for a late payment, which can spark a dispute.
3. Collect by Mail
Having tenants mail in their rent is a great option if you live far away from your rental properties. Even better, you might give your tenants pre-addressed and stamped envelopes to use, making the process of paying rent even easier.
Here are some best practices to follow if you’re going to allow tenants to mail in their rent payments:
- Only accept check, money order, or a cashier’s check for safety purposes (no cash!)
- Require that rent be received by a certain date, not postmarked by a certain date
- Don’t have tenants send rent to your primary residence
- Always check the postmarked date to identify rent that was sent late
- Outline in the lease agreement what happens if rent is late
If you want to accept payment by mail, it’s best to enlist the help of a property manager. A professional knows how to handle all situations that can pop up because of mailing issues.
4. Enforce a No Cash Policy
No matter how you collect rent from your tenants, cash is never recommended.
For instance, cash is easily lost or stolen, leaving you and your tenants to hash out what to do about the non-payment of rent.
Not to mention, cash leaves no paper trail. If your tenant wants to claim they made a cash rent payment, there’s no way of proving that they didn’t.
To prevent landlord/tenant trouble, have your property manager include a “no cash” policy in the lease. Then, provide acceptable ways tenants can pay their rent so they know exactly what’s expected of them.
5. Go with Direct Deposit
You can have your bank set up automatic online transfers from your tenant’s bank account to yours each month. Not only does this make it simple for tenants to pay each month, but it also ensures you get your money each month.
That said, there are some cons to using this rent collection method:
- You’ll have to convince your tenants to automate monthly rent payments, which may not sit well with them
- There will probably be a monthly fee for using your bank’s direct deposit services
- You will have to have a business bank account
- Your business account will have to be closely monitored for accounting purposes
- If you have multiple properties, chances are you’ll have to set up multiple accounts to keep your finances organized
Automating the rent collection process is a good idea if you want to make sure you get paid each month. However, there may be more cost-effective and simpler ways to do this.
6. Collect Rent Online
One of the most convenient and popular ways of collecting rent from tenants is online. You can collect rent using an online payment service or use your Alpharetta property management’s online portal if they have one.
This way of collecting rent is beneficial for many reasons:
- It gives tenants an easy way to collect rent
- Tenants choose when they want to pay since you can accept online payments 24/7
- Money is easily deposited directly into your bank account
- Rent payments are easily recorded so you always know when rent was paid and by whom
Taking advantage of technology is a great way to run a successful rental property business.
That said, give tenants that don’t want to make online payments an alternative to keep tenant satisfaction high.
7. Draft an Airtight Lease Agreement
No matter how you decide to collect rent from your tenants, having a solid lease agreement in place is the key.
In fact, a good lease agreement can make the process of rent collection smooth.
For instance, make sure to address how much rent is due each month and when it’s due. In addition, add in provisions that address the grace period and what constitutes a late payment. Provide your tenants with all the ways you or your Alpharetta property management will accept rent.
And always outline in detail what will happen if a tenant is late on their rent, including the initiation of eviction proceedings. This way, everyone knows what’s expected of them at all times and there is no room for excuses.
Are You in Need of Atlanta Property Management?
Contact Atlantic Property Management today to learn how we can help with not only rent collection but everything else rental property related. We have experienced property managers on hand ready to enforce our strict rent collection procedures and get you paid each month.
Plus, we are dedicated to making your job as a landlord as stress-free as possible. This means advertising vacant properties for you, placing high-quality tenants in your rental, and handling all maintenance and repair requests so you don’t have to. All you have to do is enjoy your investment property, the income you’re generating, and your financial freedom.