Rent collection is the number one duty of landlords and the number one reason why many lose money on their investments. New Jersey is no exception to this rule, and eviction numbers nearly doubled in New Jersey between 2000 and 2018.
If you want to make sure your tenants pay their rent on time, every time, you must have an effective strategy in place. If you're new to the world of rental income, don't stress! Read on for tried and true tips for rent collection.
Start With Great Tenants
The best place to start in your rental collection process is by conducting a thorough background check of all of your tenants. You want tenants in place who have solid credit and rental histories. They shouldn't have red flags like bankruptcies or repossessions on their records.
You'll also want to make sure that their employment record is solid, and their rent-to-income ratio doesn't exceed 30%.
Online Portals Are Key
The days of running to your apartment's leasing office and turning in a paper check are over. In fact, many landlords these days only accept rent payments through online portals. That's because online portals allow tenants the flexibility to pay their rent on time, no matter where they are.
You don't have to worry about your tenant going out of town and forgetting to pay the rent. You can choose to only allow bank account payments or include credit card payment options.
Have Firm Penalties
Many people need a reason to pay their rent on time instead of letting it slide. That's where late fees come in. If your tenants do not pay their rent by a specified date, charge a late fee.
Most landlords post notices on their tenants' doors on the day on which the late fee is charged. These notices are a demand for your tenant to pay their rent, including the late fee, by a specified date. It should include notice that you'll file for eviction if they do not pay.
Know Your Eviction Duties
Eviction is an unfortunate reality many landlords face when trying to collect rent payments. You'll want to brush up on New Jersey's requirements for eviction, including how you should give tenants notice. There are certain things that you can do as a landlord that may nullify the eviction, so you need to be familiar with your legal rights and responsibilities here.
If you have questions about how to proceed, it's always a good practice to bring in outside legal or professional help.
Need Help With Rent Collection?
Collecting rent every month can be a nightmare, especially for landlords with a lot of properties in their portfolio. Having a solid rent collection strategy and applying it consistently to every single tenant is the best way to make sure you collect rent and stay out of the courtroom. If you're struggling to keep up, hiring a property management company is a great way to reduce your stress!
Do you think a property management company may be the right move for your rental property? PMI Essential has all of the expertise you need to manage everything from rent collection to tenant retention. Contact us today to learn how we can help you!
