Rent Collection for Landlords: A Quick Guide

Rent Collection for Landlords: A Quick Guide

Investing in rental properties in Chattanooga, TN is one of the wisest things you can do. Rental properties bring in reliable passive revenue streams, which allows you to focus on other things. Whether you want to retire early, build impressive wealth, or become a significant property investor, starting with a few rental units is the way.

However, the only way to become a successful landlord is by finding qualified and reliable tenants. Just as importantly, you need to understand the basics of rent collection.

Do you know how to collect rent? What do you do if a tenant is late or simply not paying?

We're here to help you learn more about being a landlord and collecting rent. Keep reading for everything you need to know.

Know Your Rent Collection Options

There are a number of ways to collect rent. If you don't like doing things online, you can keep everything in the 3D world.

If you go this route, set up a dropbox at your office or allow your tenants to mail you their payments. In this case, there are multiple types of currency you can use, including:

  • Cash
  • Checks
  • Cashier's checks/certified checks/money orders

However, your tenants might not feel comfortable mailing cash or any other payments.

If you don't mind using electronic or digital transactions for collecting rent, you can simplify the process substantially. For example, ACH debit transactions are automatic transfers from a checking account to another account.

You can set up automatic payments for tenants to make their lives easier. This will also mitigate the number of late payments you receive. Other online payment options include online payment apps like PayPal, Venmo, and Google Pay.

And finally, if you don't want to handle rent collection at all, you can hire a property management company to do it for you. Property management services also include late payment warnings, eviction notices, and more.

Define Your Rules and Policies of Rent Collection in Your Lease Agreement

Putting everything in your lease agreement is one of the most important tips when learning how to collect rent. It's imperative that your tenants know exactly what you expect of them in terms of rent collection. This includes:

  • Method of payment
  • Time of payment
  • Fees and penalties for late payments
  • Eviction policies for continual payment issues

You must enforce a late payment policy to negate late and missing payments. However, it's important not to create unnecessary strife between you and your tenants if a payment is only a day or two late. Furthermore, you should charge no more than 5% to 10% depending on how late the rent payment is. 

However, if a tenant is consistently late or short on payments, it might be time to give them an eviction warning. Of course, your leverage for eviction will be outlined in your lease agreement.

Do You Need Help With Rent Collection in Chattanooga, TN?

As you can see, there are a lot of rent collection options out there. Which method will you choose? Do you need help collecting rent?

Look through the rest of our blog to find more tips for landlords. And if you want help collecting rent, managing your property, or dealing with tenants in Chattanooga, TN, we're here for you. Contact us today at the Home River Group.

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