If you own rental properties, then you know that it is inevitable that tenants will pay the rent late. Some will occasionally pay late; others will pay the rent late as a rule. If you own just a few properties, or just have a very tight budget, then these late payments mean that your mortgages will be paid late and your credit rating will suffer.
You can talk and cajole until you are blue in the face, and your tenants will never understand that their actions are negatively affecting you. I have had people say to me “well you own houses, my not paying one month won’t hurt you, give me a break”. I want to give them a break, all right… break their necks. But that’s highly illegal. So instead, I have to find creative ways to get the tenants to pay the rent on time.
Get your tenants to pay rent on time by telling them you will lose the house if they do not pay. As far as any of my tenants know, I only own one property besides the one I live in. I make it clear to them upon moving in t.at if they do not pay, and then the mortgage is not paid. I tell them the bank will not have as much problems kicking them out in the street as a property owner would.
Get your tenants to pay rent on time by making it easier for them to pay. Some people do not pay on time simply because it is inconvenient. Therefore, I offer payment options like weekly or biweekly payments that can be paid through automatic debit. If tenants are willing to pay weekly, or biweekly, then I give them a Christmas refund so they can buy presents. I can give the holiday refund because they are making extra payments during the year so it all comes out even in the end. To top it off, offering the Christmas refund makes them like me. People generally pay the people they like first.
Get your tenants to pay rent on time by giving them an early payment discount. I set the rent price at $25.00 to $40.00 more than I need for the apartment. I write into the lease that if they pay me on early or on time, they can pay me the discounted amount. However, if they pay on the second or after, they need to pay me the full amount. This discount has a two-fold effect. Firstly, the chances of them paying on time, or even early, are greatly increased. Secondly, when they hear the word ‘discount’ they feel like they are getting a great deal.