Late rent payments are not only inconvenient for Honolulu owners, they’re also a setback to your finances. You may have a mortgage payment to make or insurance to pay for, and when rent is late, your cash flow is disrupted.
The best way to collect rent on time is by being consistent and setting expectations up front. Today, we’re sharing a few tips to help you collect rent and keep your Honolulu rental property profitable.
Communicate with Honolulu Tenants
Your rent collection policy starts with your lease agreement. Make sure the lease states when rent is due, how it is to be paid, how much is due, and what the consequences will be if it’s not paid on time. Talk to your tenants about any grace period or late fees that are part of your rent collection policy. If they seem to have any confusion, you can direct them back to the lease.
When rent is late, your first step is to inform the tenant. It’s completely possible that your tenant simply forgot. Many Honolulu landlords don’t realize that collecting rent can be as easy as picking up the phone or typing out a reminder. Let your tenant know that rent is late, and ask when you can expect it to be paid.
Be Consistent with Late Fees
You have every right to charge a late fee if your lease allows it. For some Honolulu investors, it may make sense to waive the late fee on the first offense. If the tenant usually pays on time, takes good care of your property, and doesn’t cause trouble, you might be willing to ignore the late fee for this unusual circumstance. However, don’t make a habit of waiving late fees, otherwise your tenants will not take the rental due date seriously. If you waive the late fee every month, the tenants will have no incentive to pay you on time. When you waive the late fee because you’re putting a payment plan in place, put the terms and conditions and deadlines in writing so there can be no confusion.
Avoid Emotional Decisions with your Honolulu Rental Property
When rent is late, your tenants may have a dramatic story to tell you. There could be a death in the family, a major medical expenses, or some kind of catastrophe that is causing them financial problems. It’s okay to be sympathetic, but remember that you’re running a business. Don’t get sucked into your tenant’s personal problems. The longer a tenant goes without paying you, the less likely it is that he or she will be able to catch up.
Posting a Five Day Notice
Post a Five Day Notice if you don’t get your rent on time, or the deadline for a payment arrangement comes and goes without a payment. You don’t want to wait until later in the month to start this process. Serve the notice, and if the tenant comes through with rent, the eviction process doesn’t need to go any further.
If your tenant is completely unresponsive to your demands for payment, talk to an attorney or a Honolulu property management company about starting the legal eviction process. You can contact us at HappyDoors Property Management, and we’d be happy to help.