No landlord wants to deal with non-paying tenants, especially if they’re relying on rental income alone. However, this situation is inevitable in the world of real estate investments. Fortunately, you don’t have to resort to evicting your tenant. After all, retaining a tenant with a history of late rental payments is often better than replacing them. That way, you won’t have to deal with vacancies.
When you’re dealing with a tenant that’s past their rent due date, you still have time to rectify the situation by following the steps we outlined below:
What should you do if your tenant’s rent payment is late?
What can landlords do if they’re dealing with tenants that aren’t paying their rent on time? When tenants don’t pay their rent, landlords start to lose the money that they were planning to spend on maintenance, insurance, luxury home management fees, and so on. Landlords simply can’t let late rent payments slide.
If you’re a landlord and your tenants aren’t paying their rent, here’s what you can do:
#1 Check Your Lease Agreement
Not all lease agreements are the same. Sometimes, contracts contain a clause that describes what can be considered “late”. Who knows? Perhaps your renter isn’t actually late with their rent. Lease contracts typically include a three- to -five-day “grace period” where tenants can pay their rent after the due date. If the grace period has passed, then you can conclude that the tenant is indeed late. If the contract specifies a late fee, you can collect that, as well.
#2 Send Your Tenant a Notice
Is your tenant even aware that they’ve missed their rent? The second step is to send your tenant a late rent notice. The notice should include the date the rent was due, as well as any late fees that they owe. However, if this is your tenant’s first offense, you should consider waiving the fees as a courtesy. You can opt to send the notice in person or tape it to their door. Alternatively, if your rental unit is being managed by a single family property management company, they can send the notice through a tenant portal.
Hopefully, this is the first and last time that your tenant fails to pay their rent on time. If not, you can use the late rent notices as evidence during the eviction proceedings.
#3 Consider Calling the Tenant
If your tenant has not responded to your late rent notice, consider contacting them. Once you remind them that you’ve served them a late rent notice, chances are that they’ll pay you in an instant. If they’re unable to pay, be open to understanding their situation.
If this is the first time they’ve failed to pay promptly, you can let it slide. If your tenant is withholding rent due to repair issues that you haven’t addressed, you should review the contract to see if they’re correct.
If possible, call your tenant only once. You don’t want to be accused of harassing your tenant to pay up, do you?
#4 Serve Your Tenant an Eviction Notice
The non-payment of rent is a clear breach of the lease contract. If your tenant refuses to pay their rent or does not want to cooperate, you can serve them an eviction notice. The notice should clearly indicate why you’re evicting them, how much they owe you, and when they should pay you.
It’s important to note that in some states, you need to give your tenants time to pay their rent prior to serving them an eviction notice. For instance, in Florida, you can only evict a tenant if they fail to pay their rent three days after they’ve been served the notice to pay rent or quit. Be sure to consult your property management company’s legal counsel to avoid being sued by your tenants.
During the eviction proceedings, you’ll have to present your case in court. Chances are that you’ll have to prove that your tenant received the notices (e.g. late rent notice and eviction notice), which is why you should always store important records. If the court rules in your favor, your tenant will have no choice but to vacate the unit.
Generally, evictions are time-consuming and costly. So, instead of taking legal action, talk things out with your tenant. If your tenant’s reason is valid, solving their problem may save you more money in the long run. In addition, remember that you need to protect your reputation — if you’re inconsiderate, you’ll have a hard time attracting tenants in the future. Plus, your current tenants probably won’t renew their lease.
What can you do to help tenants with their rent?
There’s a difference between tenants that refuse to pay their rent and tenants that currently can’t afford to pay their rent. As a landlord, you should be considerate when you’re dealing with tenants that are having a hard time paying their rent. While you can’t pay off their rent, you can offer your assistance:
#1 Reduce the rent
Is this the first time your tenant has failed to pay their rent? If their reason is valid, you should consider decreasing the rent for a short period. This will give them enough time to sort out their finances. Be clear that the reduction isn’t permanent and that the rent will return to its original amount at the agreed-upon date.
#2 Research rental assistance
If your tenant is unable to pay their rent, they may be eligible for rental assistance from the Department of Housing and Urban Development (HUD). Additionally, individuals that are going through pandemic-related trouble can take advantage of the eviction moratorium issued by the Centers for Disease Control and Prevention (CDC).
#3 Allow them to leave
This goes against what most landlords stand for, but in some cases, it’s the best option you’ve got. Let your tenant leave even though their lease isn’t ending any time soon. Forget the fees — sometimes, it’s better to find a new tenant so you won’t have to waste time with lower rental rates.
The bottom line
It can be stressful when tenants can’t pay their rent — especially when this situation could’ve been avoided. With a property management company such as Luxury Property Care, you can rest assured that the most responsible tenants will reside in your rental unit. This is because we conduct a strict tenant screening process to be certain that your tenants will pay their rent on time. As South Florida’s top property management company, we also use cutting-edge technology to help tenants pay their rent easier.
Get in touch today by dialing (561) 944 – 2992 or by completing our contact form. We’d love to tell you more about our investment property management services.
