Across America and across California specifically, now is both rewarding and a challenging time to be a landlord. Rents are rising at some of the fastest levels on record while soaring demand is giving landlords some much-needed flexibility after a challenging 2020. At the same time, rent disputes and evictions are soaring, as both landlords and tenants navigate a changing market.
As a landlord, one of your most important duties to get right is rent collection. Rent collection done right will help you to avoid costly disputes and ensure a more secure income. If you're looking for actionable rent collection advice, make sure to avoid these crucial rent collection mistakes in 2022.
1. Not Being Consistent with Rent Collection
Any professional rent collection guide will tell you that consistency is key. Set consistent terms that all tenants must follow. Make sure that the lease agreement stipulates the time that rent must be paid each month and the exact amount that must be paid.
If you give an inch and let something slide, your tenant may decide to take a mile in the future. Consistent in-person or online rent collection will also give your tenants clarity so that they know exactly what they need to do and when.
2. Not Charging Late Fees
Late fees might seem harsh, and they might not always be necessary. However, they are the single most powerful enforcement tool that you have to disincentive tardy payments. The presence of a late fee policy lets your tenants know that you take your responsibilities as a landlord seriously and that they should take their responsibilities as tenants seriously too.
3. Not Keeping Records of Payments
If a tenant refuses to pay rent, you can take legal action. However, you will not have a strong case if you have no records of past rent payments. Always keep meticulous records of all payments and ensure that they are not just going straight into your personal bank account. Remember, you can also report non-payment of rent to a credit agency, which can incentivize a tenant to pay up. However, this course of action is closed to you if you have no record of payments.
4. Jumping Straight to Eviction
There are many reasons why tenants do not pay rent. Sometimes it is an honest mistake. Other times, circumstances might mean that they are quite literally unable to pay. Always find out the reason first and do not move straight to eviction. Most states have "pay or quit" laws in place - California included - which means that you must give the tenant the option to pay back rent before you evict. Speak to your tenant first and try to understand the problem.
5. Trying to Force a Tenant Out
If you feel like you cannot evict a tardy tenant, you might feel tempted to encourage them to leave. Some landlords do this by arranging intrusive repairs on the property to make it less liveable, or by harassing the tenant. Do not do this. Not only is this likely to be illegal, but it could destroy your reputation as a landlord and make it difficult for you to find tenants in the future. Always pursue the legal route if you have to remove a tenant from your property.
Not Hiring a Professional Property Manager for Your San Mateo Property
The number one rent collection mistake you can make is to try and do it yourself. Instead, you should choose a professional property management service that will take care of everything on your behalf, the right way. If you are a landlord in the San Mateo, CA area, we have got you covered. Make sure to get in touch today to find out what we can do for you.
