Tampa Property Management Tip #17– If You Want to Collect Past Due Rent Do not Let the Tenants Set the Terms
In our Tampa property management company, collecting rent is very tricky and requires some insight into the psychology of dealing with tenants. The most common method of rent collection is to insist the rent is paid on time or an eviction is filed after the 3 to 10 day notice expires (changes depending on what State). If the landlord doesn’t follow through with this threat, the tenant knows that paying rent on time is optional because there are no consequences.
I think it is better to save the eviction threat till later. We insist that at least ½ have the rent is paid by the 15th if they are a new tenant. The balance of the rent must be paid by the end of the month with the late fee. However, we are flexible. If the tenant makes a good effort and pays us the majority of the rent by the end of the month, we will set-up a payment plan over the next two months to pay the balance. Depending on whether you are dealing with middle class, working class, or low income tenants dictates how we work with them.
Every landlord should expect problems with working class and lower income tenants usually 3 or 4 times a year. As a rule of thumb, they are not good at budgeting their money. Car repairs, high electric bills, school clothes, and Christmas gifts usually catch these people unprepared from time to time. Tenants feel, right or wrong, that you should be patient with them once in awhile when they get into financial trouble. I would agree.
It really just depends on what type of tenant you are dealing with and how long they have rented from you. You never want to allow a tenant to get two months behind in rent. Once that mark has been reached, you must file eviction immediately regardless of the tenant’s reasons. However, you should not allow them to fall that far behind unless they have been excellent tenants for a long period of time. If a tenant has been with me less than a year, I give them till the 15th to pay half the rent. If they do not make that date, I call or meet with them in person and tell them I am filing for eviction on the 18th if the money is not paid.
Come the 18th of the month, I file for eviction no matter what. You must do what you say or the tenant will not take you seriously. I find that half of the time the tenant will suddenly come up with all the money and eviction costs once they receive the eviction papers.
The real key to collecting the past due rent is being firm, polite and a good listener. I will ask them why they haven’t paid the rent, and I will than shut up. Many times, the tenant will tell you the rent will be paid in full on the 8th or 10th. This is better then getting ½ by the 15th and I will accept this payment plan.
If the tenant says the rent will be paid with next month’s rent, I draw the line and explain how they must pay at least ½ by the 15th or I will file for eviction. You cannot let tenants dictate payment terms unless the terms are better than your worst case scenario. And you never want to waive late fees on a regular basis. Once in awhile is okay, but if you do it all the time, you will always be chasing tenants for late rent.
I will never use curse words, yell, or scream. Being polite and patient goes a long way in collecting rent not just this month but every month. Tenants will appreciate and remember that you always dealt with them calmly and firmly. If the tenant loses control, just state your position of when the rent must be paid and end the conversation. Tenants have bad days and occassional short fuses just like everyone else. Our Tampa property management company’s purpose (when it comes to collection) is to collect rent and late fees, and therefore, we are realistic that tenants will pay late from time to time.