Frustrated Landlords – Making Sure You Receive Rental Payments On Time
Ask yourself one simple question – why did you invest in buy-to-let property all those years ago? So you could make money.
As a private landlord it’s vital to collect your rental payments on time because the knock on effects for you can be disastrous. Many landlords use the income generated on lettings to pay for the mortgage payments – if you’re not receiving rent on time consistently, then you’re in a lot of trouble.
If you’re a private landlord looking to improve the reliability of monthly rental payments then you’re going to love this guide. We have listed three of the best and most popular ways to increase the likelihood of regular payments from tenants.
Make Sure You Communicate Effectively from the Start:
As with most things in life – clear communication is extremely important, so many of the UK’s biggest problems arise from unclear communication amongst politicians.
Before you sign tenancy agreements, sit down with your tenant(s) and talk through your expectations as a landlord and what they expect from you as a tenant. Make it clear when the monthly payments are going to be due so there is no misunderstanding.
A lot of rental payments are missed simply because the landlord failed to confirm a payment date. Don’t let that happen to you. This is also a good time to make your tenants aware of any late payment fees that will be added as a result.
Start to Consider Why Payments Aren’t Being Made:
If your tenants are making late payments month after month then something is wrong somewhere. As the landlord, it falls with you to identify the problem and make sure it is resolved.
Make the effort to contact your tenants and set up a meeting the try and understand what is going wrong. There are a few questions that you can ask:
- Ask for their opinion on why payments aren’t being made
- Ask if the current payment date is suitable (would a change help?)
- Are the current rental payments affordable?
- Request that the tenants set up a standing order (automatic payments)
Report Bad Payers to Credit Check Bureaus:
In extreme cases and if you have exhausted all of your professional approaches, consider reporting your tenants to a credit check bureau.
No body wants bad credit. Of course this is an extreme measure and should only be considered if tenants are frequently missing payments and not responding to payment requests.
As a landlord, make them aware of your intentions should any outstanding payments remain unpaid.
Although extreme, it provides your tenants with a real incentive to make payments on time. On the other end of the spectrum you can also reward good payers. Recommending them to bureaus to help improve their personal credit scores.
Remember, you can also upload your ‘good and bad’ tenants onto the TR Group Tenant History database. Please click here for full details.
Author Bio: Ed Davis, Co-Owner and contributor to Davis and Mac, a traditional Man and Van London.