Rent Collection: What to Do If Your Tenants Don't Pay

Rent Collection: What to Do If Your Tenants Don't Pay

Your rental property business relies on rent collection for success. With excellent rent collection efforts, your business has a better chance of thriving.

So what should you do when your tenants don't pay their rent? What recourse do you have as a landlord? Landlords evict around 30,000 tenants in Las Vegas yearly for failure to pay rent.

As a landlord, you might want to avoid evictions if possible. You can do this by creating a better rent collection process. A good strategy includes several steps, so keep reading to learn these.

Choose Creditworthy Tenants

The quality of your tenants plays a critical role in your rent collections. Creditworthy people have great credit scores for a reason. The primary reason is that they pay their bills.

People work hard to build their credit, and these individuals will likely pay their rent on time. If you choose creditworthy people, you can reduce the likelihood of tenants not paying rent.

Offer a Portal

Additionally, give your tenants options for paying rent. For example, offer a tenant portal. They can use this portal to pay rent monthly or sign up for recurring payments.

Setting up a portal is another preventative step to take that might make a difference.

Develop a Late-Payment Rule

One of the most crucial things to do is to set up a late-payment policy for rent payments. This policy states that you consider rent late after a set time. You could use five days as your guideline, or longer.

When tenants fail to pay their rent within this grace period, you charge a stated fee. The most important part of this step is enforcement. If you create a late rent policy, you must enforce it with all tenants.

Give Warnings

Your late payment policy should also outline your steps for collecting rent. Your tenants might follow the rules if they know the consequences beforehand.

For example, send a letter when the grace period ends when you're missing rent from tenants. Give them another chance to pay. Explain that you'll file eviction proceedings if you don't receive the rent by a specific date.

Evict the Tenant

Evicting someone isn't a fun event, nor is it free. But it's something all landlords must do occasionally.

Unfortunately, you might encounter tenants that won't pay regardless of the steps you take. Eviction might be your only recourse if you encounter tenants that won't pay.

Eviction is a legal process that requires going to court. You can avoid this by hiring a property manager to handle your business tasks. If you do this, they'll handle the evicting and other tasks.

Hire a Property Manager for Rent Collection

Regardless of your system, you'll still encounter tenants that don't pay. You can solve this by hiring a property manager to handle your rent collection. Property managers use effective strategies that work.

Contact us at Avalon Realty and Oaktree Management for help. We offer property management services in Las Vegas and can help with rent collection.

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