Whether you're a letting agent hundreds of rental properties, or a private sector landlord with a smaller portfolio, the importance of regular payments can never be underestimated.
As a Letting Agent, there is the added responsibility of being accountable to the landlord. If you the tenant is late paying rent, then that can inevitably lead to the landlord receiving their rent late. Worse still, if a tenant guarantee service is offered, you will be left out of pocket by having to reimburse the landlord for any loss of rent due to arrears. There are ways to counter this, which will be covered later, but this article will prevent the need for such steps.
As a landlord, your financial situation can quickly go from comfortable to desperate. And the smaller your portfolio, the more of an impact rental arrears can have on your balance sheet.
Now we've highlighted the potential dangers of rental arrears, I will outline a few simple but very effective measure you can take to ensure your rent is paid on time.
1. Try to ensure your payments are all around the same date. The 1st day of each calendar month would seem the most suitable, as most people are paid around the end of each calendar month.
2. Check you rental income weekly as tenants sometimes like to pay rent early as well and late. They have also been known to pay in partial amounts of rent as and when it becomes available ot them.
3. Try to offer as many payment methods as possible. If a tenant is uncomfortable using the internet, then online payments would obviously be unwice. As a landlord with a smaller amount of tenants, you could give them their own paying in books for a dedicated rental income account.
4. If you let your property to tenants who are in receipt of benefit, they are sometimes paid every four weeks instead of by calendar month. Make sure you prepare for the possibility of rentals coming at different dates during the month.
5. Keep up active communications with your tenants. Sometimes there could be a genuine reason for the tenant to fall behind with the rent. A proactive approach to arrears prevention should always be taken in order to prevent problems before they occur.
6. If all else fails, make sure you insure your rental income with landlords insurance. it can make all the difference, especially if you're a landlord with a smaller portfolio.