How to Avoid Unpaid Rent

Certainly the most feared part of renting out a space is not getting paid on time. It’s well known that housing costs consume the largest chunk of one’s budget, and we’re sure that’s no different for you, however some tenants view the landlord as having an expendable income.  This means they don’t feel that their landlord is reliant on the timely payment of rent. Countless landlords have asked us how to make sure that late rent payments do not become a reality and it is for this reason that we have compiled a list of suggestions that will make sure you are never surprised at the end of the month with an unpaid bill.

First Thing: Before Signing the Lease, Check Out The Tenant

This cannot be emphasized enough! Before you commit to renting out your space to another person check out their background. You have the right to do so! Ask for references and check in with their previous landlords. Make sure to ask them if the tenant had always paid on time and if they had ever experienced any problems! Ask questions about their character too! Another important thing to do is make sure that they are willing to put a deposit upfront. If they are negotiating the price of the deposit with you it may mean that down the road, finding money for paying rent could be difficult! Request to see recent payslips if they are employed or if they’re a student, ask to see official forms guaranteeing payment of grants or scholarships. Doing so will assure that they have a means of paying the rent on time.

Second: Be Precise

When you’re making your ad, make sure that you are as precise as possible when determining the price that will be paid to you by the tenant. While it’s obvious that their rent should be explained, let them know what the average pricing for utility and other bills are! Will they be responsible for helping you pay certain taxes? The electric bill? The gas bill? Or is that all included in the rent? Don’t be afraid to be clear about it. If you hide the numbers and don’t let the tenant know what to expect, they will potentially be surprised by the payments you are expecting and not have enough money at the end of the month. Remember: honesty is the best policy!

Third: Regulation of Rent

When the lease expires, landlord have the right to raise the rent. The locality in which the rental is located generally provides information as to what the average price of rent is in your area as well as, on occasion, the maximum amount rent can be raised upon each lease signing. Be careful not to raise the rent too much as you can scare away your tenants, or cause them to believe that you are trying to force them out of your accommodation.

Fourth: Make it Easy

In the same way that a telephone bill is directly debited from your bank account, rent can be paid to your bank account. You can set up payment plans between the tenant and yourself where payment is directly placed into your account each payment period. This means you don’t have to worry about collecting a check or cash, payments getting lost or any other mishaps that could happen.

Fifth: Protect Yourself

There are insurance programmes that offer you protection if rent goes unpaid. These can be collected easily if your tenant is unable to pay you! It’s the smart thing to do! In some areas as well, if your tenant is a student, you can set up a way to receive payment directly from their institution or the government for their rent! Make sure to see if this option will work for you!