In a perfect world collecting rent from your tenants would be simple. Every tenant would pay their rent on time, in full, without a reminder. But we don’t live in that world, and the truth is that even the best tenants can miss a rent payment. When you’re in the business of Atlanta real estate management you need rent paid on time each month to keep your business afloat. In order to avoid becoming a collections agent or facing an eviction, you need to start early in the rental cycle. Read below for our seven steps for better rent collections that will help you not only avoid evictions but will establish a great tenant-landlord relationship.
Step 1: Strict Tenant Screening
Finding a high-quality tenant starts with proper tenant screening. Every resident over the age of 18 should be screened, even if they are not responsible for paying rent. And while tenant screening cannot predict things like a job layoff, it is the best way to ensure your tenant is capable of taking care of their responsibilities. Here is what we recommend:
- Background Check: Perform a criminal background check on every applicant. Take note of anything concerning that shows up, such as a recent felony conviction.
- Credit Check: Property management experts will tell you less than perfect credit isn’t always a reason for concern. After all, many tenants rent while they build their credit and save in order to buy a house. However, you will want to steer clear of tenants with recent bankruptcies, auto repossessions, evictions, or anything else concerning on their credit report.
- Employment and Income Verification: Always verify your tenant’s place of employment and their income before approving their application. As a rule of thumb your tenant should earn three times the monthly rent in order to qualify.
- Rental History: Tenants applying for your rental should supply information about their rental history. Even if they do not have an eviction on their record, there could be other red flags. A history of late rental payments, property damage beyond normal wear and tear, or lease violations could disqualify them from renting your property.
After more than 30 years in the Atlanta real estate management business we can tell you that most evictions could be avoided with proper tenant screening. For more information on how to screen tenants visit our blog post here.
Step 2: Setting Clear Expectations Upfront
You found a tenant, screened them, and now it is time for lease signing and move in. You may think the hard part is over, and now you can just sit back and collect the rent checks each month. However, before you move on, you need to set clear expectations for your tenant about rent. Turnover and evictions are often caused by simple misunderstandings between tenants and landlords, which is why we work hard to communicate clearly from the very beginning.
When your tenant signs their lease point out things they need to know, including
- Rent due date.
- When rent is considered late.
- What fees will be added to late payments.
- Process of notifications and eviction.
- What forms of payment are acceptable.
- How to contact the landlord or property management company for questions or concerns about rent.
It is important to be firm but fair when discussing rent payment with your tenant. When they know exactly what to expect from the tenant-landlord relationship, you are setting yourself up for success.
Step 3: Establish Incentives
Let’s face it, paying rent is not always going to be at the forefront of your tenant’s mind. Some tenants are simply forgetful and need a little incentive to remind them. Rather than waiting until they miss a payment and hitting them with a late fee, we suggest establishing incentives for on-time payments. Our Specialized Resident Benefits Program offers savings to tenants who pay their rent on time. Tenants can save hundreds of dollars each month on things they buy every day. We find that when tenants are offered incentives like our benefit program it makes them more likely to pay their rent on time and in full every month. Talk to one of our property managers today for more information about our Specialized Resident Benefits Program.
Step 4: Technology Driven Atlanta Real Estate Management
How do you collect rent? If your tenant has to mail a rent check or deliver it to your office once a month you are living in the dark ages. Paying rent with a physical check is not only a hassle for everyone involved, it increases the time between collecting rent and receiving funds.
Cut down the barriers to quick and easy rent payment by using a technology-driven platform like our tenant portal. By logging on to their personalized tenant portal your tenant can easily pay rent, from the comfort of their own home, any time they want. No more writing out a physical check and placing it in the mail or delivering it to your office.
Electronic payments are beneficial for property owners as well. When a tenant pays their rent online the funds are electronically deposited into the property owner’s account via ACH. The process is simple and quick and ensures your rental income is delivered on time. For more information on how we use leading technology for property management, visit our recent blog post here.
Step 5: Automatic Collections Process
We recognize that even when all the steps above are followed, a tenant may still miss their rent payments. When rent is not paid on time what do you do? In order to be fair you must have a process in place before your tenant signs their lease, and clearly communicate the process to your tenant. At Specialized Property Management Atlanta every time a tenant’s rent is not paid on time it triggers an automated collections process. This process ensures tenants are given proper notice of late rent, fees, and consequences if the rent is not paid. Here is the process we use:
- Warning of overdue rent
- Notice 1
- Notice 2
- Notice 3
Evictions are bad for both the tenant and the property owner, which is why we do our best to avoid them through expert property management. However, when an eviction becomes inevitable our team is respectful yet tough to ensure your investment is protected.
Step 6: Legal Expertise
Evicting a tenant is a legal process that, if not handled properly, can be costly and drag out for months. Filing and delivering the appropriate paperwork, showing up to court, and making sure you have all of your documentation in order takes time. In addition, if you are evicting a tenant for non-payment of rent, every day that your tenant remains in the property is a day you are not collecting rental income.
In order to minimize rent-free days and get your investment back up and running our Atlanta real estate management experts move through the eviction process as efficiently as possible. After over 30 years in the business, our team has the legal expertise you need to process an eviction fairly and quickly.
Step 7: Keep the Process Professional
In property management it can be difficult to separate the personal from the professional. After all, you are dealing with your tenant’s home and personal space. However, at the end of the day, owning rental property is a business and all interactions should be handled professionally. By setting expectations early, communicating clearly, and handling all issues professionally you are setting yourself and your tenants up for success.
If you are finding it difficult to keep the professional and personal aspects of owning rental property separate it is time to hire a property manager. Our team of property managers handle every aspect of the rental cycle with ease and expertise. Whether it is collecting rent, sending late notices, or beginning the eviction process, our property managers will navigate the process effortlessly. Just look at what a few of our property owners and tenants have to say about their experience with our Atlanta real estate management company:
“This company as a whole works together and it’s so refreshing. …the showing process was seamless and the team was readily available for questions. I wish all companies worked like this one.”– Eddie C. Google review
“I am really impressed with this organization. The communication and professionalism is beyond excellent; they are light years ahead of all of the property management companies I have done business with.”– Andrew W. Google review
“SPM has a lot of systems and procedures in place that were lacking for me before. I feel like if I ask a question or if my tenants do, they will be quick to respond and know what to do. So far my experience has been good!”– Jessica F. Google review
If you’re ready to leave the headache and hassle of managing rental property behind, give us a call. Our experienced professionals and proven processes will work to turn your investment into a success.