Many contracts say that rent is due on the 1st of each month but the late charge doesn’t kick in until the 10th. So it’s no big deal if the check arrives on the 5th, 6th, or even the 9th. Right? We hate to break the bad news but your leniency on rent is only going to encourage more delinquency. You’ve heard this before from us – human nature!
Maybe it’s time to get more serious about on-time meaning ON TIME! Here’s an idea crazy enough that it just might work. Don’t give them nine days of wiggle room. If the due date is the 1st, then apply a late charge on the 2nd, and don’t make it a paper tiger. Actually charge it and make them pay it.
This is your livelihood they’re screwing around with.
Tough? You bet, but it works! Of course, you don’t want to sneak this past them during the contract signing phase. Make a big deal about it. Communicate the rules clearly. Have them circle and initial the part of the contract that outlines rent payment dates and give them a separate document to take home.
Take serious and, more importantly, quick action on late payments. No excuses and no negotiations to catch up next Friday. If they say it’s in the mail, ask for a substitute check and send the other one back when it arrives. Another tactic is to have them agree beforehand that you may contact their “emergency” references in the event of a late payment. This is excellent payment stimulation.
Of course, if you invest in income properties the right way, like Jason Hartman and Empowered Investor Network™ recommends, your property manager will be the one dealing with all this. Just make sure he has clear instructions on how to proceed.
The Platinum Team
