Collecting rent is always an issue, with every landlord at every level. (Show me the money!) Many landlords I know make personal trips to their rental properties on a weekly, bi-weekly or monthly basis — whenever rent is due — just to pick it up in person. And somehow, they go home empty-handed way too often.
Sometimes the tenant isn’t even there . . . purposely gone for the day? Also, the excues are endless: the employer screwed up the paycheck, the tenant was sick a few days durng the pay period so the check was short, the car broke down so the rent money went to the repair shop, the kids were sick and required expensive antibiotics, yadda yadda yadda. I’ve heard it all, and I’m sure some of the excuses are valid . . .
The question is, how do you save yourself those repeated, needless trips, especially with the price of gas these days? My solution has been to give all my tenants pre-addressed, pre-stamped envelopes to send their rent. Another solution is to set up automatic deposit into your account from theirs, if they have one. (Some lower-income tenants do not.)
The only reason I go down there to collect rent is when my tenant is “on the chopping block” and it’s a case of “pay up or leave, or be evicted.” That trip is worth my time.
So . . . back to the excuses. Some are valid. Maybe most are. You’ll never know. But what you do know is this. You’re into real estate investing to make money, not to provide people with free housing. When they don’t pay, you must make a written plan — signed by both of you — for them to get caught up quickly. If they default on it, eviction is filed immediately. (That’s part of the written plan.)
Unfortunately, you can’t run this business with your heart. It just doesn’t work. Trust me — I tried it, and I nearly ran myself into the ground! My nonpaying tenants were content, but I was going broke . . . what’s wrong with that picture? Hmmm . . .
Make your rent collection as easy as possible and remember, if they pay, they can stay. Otherwise, it’s time to end the relationship.