Tampa Property Management Tip: Increasing Rent Collection with Low Income Residents
Low income tenants are often irresponsible and do not pay their rent on time. Most Tampa Property Managers struggle collecting rent from these Residents because their expectations are too high. In order to be successful with low income tenants, you need to prepare yourself that the rent will most likely be late and excuses will be made on a regular basis. There are low income tenants out there that are wonderful tenants and consistently pay on time but the majority of them will struggle paying you every month.
This does not mean that you should let your low income tenants walk all over you. You simply have to train your tenants, set deadlines, and have responsible consequences if they do not follow through.
The first step in collect past due rent is to deliver a Three Day Notice of Non Payment once the grace period has expired. Our Tampa Property Management company allows tenants until 5:00pm on the 5th day of each month to have their rent in on time. I can’t tell you how many landlords are extremely lax about getting 3 day notices delivered. Delivering timely 3 day notices sends a clear message that rent is due. You cannot expect people to pay on time if you do no consistently enforce your rules.
After the 3 day notice expires, you should call the tenant and set a “drop dead” date on which the rent must be paid in full with the late fee. Late fees are a vital asset in training your tenants to pay on time. Many landlords will waive the late fee at the drop of a hat or never even ask for it. If you do this your tenants will be late every month because they have no incentive to pay in a timely manner.
In the first year of residency you should be consistent and firm. I do sympathize with them first and listen to their story. This is important because they will remember your patience. I simply explain to my residents that we are not friends or family and therefore I can not loan them money. Their rent should be paid first before any other bill. I tell them at least ½ of the rent must be received by the 15th of the month or I will file for eviction. The rest of the rent should be set up in a payment plan that would preferably be paid at the end of the month.
A Resident’s history can also play a factor in your rent collection. If someone has been a good resident for many years, I tend to be more flexible if they run into financial trouble. Sometimes, I insist the rent must be paid by the end of the following month and other times, I set them up with $100 a month extra rental payment until the past due balance is paid. The key is to find a reasonable payment plan once you know exactly what their financial situation is at the moment. The plan should also adjust depending on how good a tenant has been up until this point.
Follow through is extremely important. If you do not stick to what you say, your tenants will take advantage of you over and over again. Be careful when making statements like, “If I don’t have the rent by the 15th I am filing for eviction.” If the 16th comes and the tenant still has not paid and you do not file for evection, you have lost all credibility.
By being patient, consistent and applying the above techniques, a Tampa Property Manager will dramatically increase their rental collection.