Non-payment of rent can cause a lot of stress and financial issues, here are 5 expert tips for resolving rent arrears.
What's the most vital aspect of being a buy to let landlord? Investing in a great property will be right up there. As will be finding the best tenant. A watertight tenancy agreement will also be on the list. But collecting the rent is surely the most important aspect of being a landlord. After all - no rent no business.
Unfortunately collecting the rent can become an issue for some landlords. And of course, rent is a common cause of disputes between landlords and tenants. But what's the best way to collect the rent and how can you make the whole process easier? And what can you do if your tenant gets into arrears?
In a perfect world rent collection is simply a matter of checking your bank statement every month and noting the rent has arrived as usual. Unfortunately, this isn't always the case. But how can you as a landlord minimise the risk of your tenant falling into arrears? Or allowing those arrears to mount up? Avoiding these common mistakes can help.
· Make sure your tenancy agreement clearly states the rent schedule. And make sure the tenant is aware of the consequences of not paying the rent. If you have a 'late payment penalty clause' included in the lease make sure it's compliant with the Tenant Fees Act.
· Don't let things drift. If the rent doesn't arrive on schedule immediately contact your tenant. Don't think "I'll give it a week and see what happens."
· Never accept partial payments. Insist on full payment. Accepting a part payment may only delay the inevitable. And it also signals to the tenant you're happy not to accept the full rent.
· If your tenant gets into arrears work out a repayment plan if necessary. But never accept less than the full rent plus a payment towards the arrears. Try to avoid eviction but at the same time don't allow the situation to get out of hand.
How to collect rent
So, what's the best way to collect rent?
Try to make it as easy as you can for the tenant to pay their rent. Advise them to set up a standing order. But do be prepared to accept other forms of payment.
It’s hard to imagine many tenants will want to pay their rent by cheque. But by accepting their payment this way you're at least reducing the chances of them missing a payment. The other option is cash. Again, not very satisfactory from your point of view but at least you've got your money. In general, though try and get your tenant to set up a standing order. A BACs transfer is also another option.
Send your tenant a reminder text a couple of days before the rent is due. It's easy for tenants to forget to make the payment if they haven't set up a standing order.
Using a letting agent's rent collection service is the easiest and possibly most efficient way to collect rent. And it's completely hands off. Ideal if you don't want the hassle of dealing with tenants. And it saves you so much time.
Let us take all the stress out of collecting your rent. For a small monthly fee per property, we'll collect your rent for you. And our Good Landlord service includes a rent protection policy. This means if your tenants did not pay for any reason, we will make a claim to have this paid to you by our protection policy.
And, if your tenant does get into arrears, we'll manage the situation for you to get things back on track. For additional peace of mind, we've also included legal assistance as part of our rent collection service. And even provide possession assistance.
Private landlords can find tenants fast by listing their property with MakeUrMove, the online letting platform bringing landlords and tenants together.