Your tenant has a late rent payment.
Late rent payment can put you in a financial bind. The best solution is to have a plan before the situation happens. We have a three step process for dealing with late rent payments. It centers on our lease and execution of it. Rental property is our business and we treat it as such. Here is how you can deal with late rent payments.
Step 1- Make your tenant aware of the process
Our lease is very specific on when and where rent is due. It spells out when and the amounts of late charges. The first late charge of $100 is assessed 4 days after the rent is due. An additional late charge $25 is assessed each day at 11:59 p.m. That gives the tenant all day to get the payment to us. We go over our process when the lease is signed.
Step 2 – Send a notification of late charges
When we have a late rent payment, we send the tenant an e-mail notice of the delinquency. The e-mail is sent the next morning after the due date. We quote the section of the lease pertaining to late fees to remind the tenant of the process. Most times tenants respond and the process ends here. If they get the rent to us before the 4th day of delinquency, they are not assessed a late fee.
Step 3 – Send 3-day notice to vacate
If after 4 days we still have a late rent payment, we report the late rent payment to the credit bureau. We also send the tenant a 3-day notice to vacate. The notice is sent via certified mail return receipt. The letter states their obligation and amounts due for rent and late fees. At this point, the tenant knows we are serious and the rent payment is made. It is a very rare circumstance that the process escalates. If we have to move past this point, we already have the eviction process in motion.
Treat your rental property as a business. You do not live for free and neither do your tenants. When you have a late rent payment, your personal finances are impacted. Have a system and stick with it.
Like us on Facebook to get more tips on running your real estate business. See Collecting Rent- Three rules you must follow for the rent collection process.