For an investment property owner, there is nothing more stressful than receiving rent late. Not only can late rent cause issues for you financially, it automatically creates doubt and suspicion about your tenants. The first 2-3 days might not be so bad, but when you haven’t received rent after 4-5 days, it’s easy to begin to worry. So what’s the best way to handle late rent? What steps should you take first and how can you prevent it from happening again?
Check Lease Agreement
To start with, it’s always a good idea to carefully review the lease agreement you use. Some of the late rent problems that many landlords deal with might be avoided by having a lease agreement that is worded correctly and clear when it comes to rent payment expectations. Re-wording or changing your lease agreement is more of a pre-emptive solution for dealing with late rent. If you’re in a situation where your current tenant is delinquent, remember to keep this step in mind before renewing their lease.
Post a Notice
Once your renter has exceeded any grace periods for paying rent, you need to notify them about the late rent. This is an important step because it lets the tenant know that you are aware of the situation and expect a quick resolution. In some cases, tenants wait until the landlord says something about rent being late before they do anything about it. A written notice can also be helpful if the situation escalates and ends up in court.
Whether you post a notice on the door of the rental home or send it in the mail, make sure that it clearly states that rent is past due and that you expect it to be paid immediately. Be sure to mention any late fees that may be associated and give a warning about what could possibly happen next if you don’t hear anything.
Make a Phone Call
The next step would be calling your tenant directly to find out what is going on. Talking on the phone directly with your tenant is a good way to make sure both parties understand the seriousness of the situation. Avoid calling an excessive number of times as that can be seen as harassment.
Start the Eviction Process
Many landlords are under the impression that the eviction process only starts once a tenant is extremely late on their rent, like 30 days or more. The truth is, evictions can take a long time. The sooner you get started with the process, the better success you will have. Remember that you are within your rights to let the tenant know that if they do not pay rent, you intend on evicting them. Often, this serves as a huge wake-up call to the tenant and may help them to address the issue quickly. However, if there is a problem and your tenant is no longer willing or able to pay rent, you’ll be glad you started the eviction process sooner than later.
Unfortunately, there are some instances when legal action must be taken for unpaid rent. This is the absolute worse case scenario for a property owner as it ends up taking extra time and money. It starts with filing a complaint with the court. If you can’t prove that you’ve posted a notice or attempted to call your tenant to collect rent, you may have to go back and do those things first before the court will take action.
It’s surprising to learn just how many rights a tenant, even one who is behind on rent, is entitled too. Once the eviction process reaches the legal stage, be prepared to spend some time waiting for the court to take action.
RPM East Valley manages hundreds of rental properties throughout the Phoenix metro area. We can help you avoid late rent payments through a number of steps, including our proven tenant screening process and professional lease agreements. Learn more about how we can help you by calling us at (480)719-1243.