It seems that collecting rent should be one of the easiest and most basic tasks for any landlord who is renting out a home in Tampa. Your tenant has agreed to pay a specific amount each month, and all of the information on how, where, and when to make that payment should be included in the lease agreement.
While it seems straightforward enough, we often hear from landlords who cannot seem to collect rent consistently or on time from their tenants.
There are right ways and wrong ways to go about collecting rent, and today we want to share some rent collection tips that work best for us as a professional Tampa property management company.
Have a Consistent and Enforceable Rent Collection Policy
Your rent collection policy needs to be clear, consistent, and well-enforced. Your lease indicates how much rent is due, when it should be paid, and what the penalties or consequences will be if it’s paid late. When you let late fees slide or you don’t follow up on late rental payments, you create a precedent that emboldens tenants to continue paying later and later.
Avoid Grace Periods or Extra Time to Pay
Some landlords will have a grace period built into their rent collection policy. So, rent will be due on the first of the month but then not considered late until the fifth of the month, after a few extra days. We don’t like this idea at Hoffman Realty because we’ve found that people tend to pay at the latest possible date. So, it’s best to keep your rent due on the first of the month and then late on the second.
Tampa Rental Payments and Late Fees
There are two purposes to charging a late fee:
- It provides an incentive for your tenants to pay rent on time.
- It will offset your own costs of having to deal with late payments, including the time it takes to communicate with tenants, the effort of posting a Three Day Notice, and the potential of having to file for an eviction in court.
When you’re deciding how much to charge in late fees, ask yourself how much it costs you to collect late rent. At Hoffman, we charge a late fee that’s 10 percent of the rental amount. This is reasonable, legal, and generally accepted in Florida. The courts don’t like to see late fees that are higher than 10 percent.
Online Rental Payments are Most Effective
It’s no longer difficult or risky to pay for anything online, and that includes rent. We have been collecting rent from tenants online for the last 10 years, and it’s convenient and secure. Most tenants today expect an online portal and an ability to pay electronically. About 95 percent of our tenants pay this way, and we highly recommend landlords offer online rent payment as an option. This may be difficult if you’re managing on your own and you don’t have access to a sophisticated property management software platform like those available to professional managers.
There are other options that can help your tenants pay rent on time. We also use RentMoney, where a tenant can print out a payment voucher and take it to retailers or convenience stores like Walmart to pay rent. This is a great option for anyone who wants to pay in case. We won’t accept cash, and we don’t recommend that you accept it as payment either. It’s too risky and requires extra work on your end.
When Tenants Can’t or Won’t Pay
It’s important to follow the legal process when rent doesn’t come in. This starts with a Three Day Notice and may lead to eviction.
This doesn’t mean you shouldn’t be willing to listen and work with your tenants, who you value. We recently had a tenant who was battling cancer. We were sympathetic to that, and while we still had to go through the formal process of filing an eviction, we were in communication with tenant the whole time, and we were able to get a court-approved payment plan in place, which worked for all parties.
It’s important that you treat every tenant the same. You can’t offer a payment plan to one and not all of your residents.
These are a few of our suggestions when it comes to collecting rent in Tampa. If you’re working on your own rent collection process as a landlord, contact us at Hoffman Realty. We’d be happy to help with any of your Tampa property management needs.