One of the things rental property owners dread the most is a tenant who doesn’t pay rent. When you have a nonpaying tenant, your cash flow and your ROI can take a hit. It’s also very stressful.
Today, we’re talking about what you should do if your tenant refuses to pay their rent on time. At Walters & Company, we strive to collect all rent in full and on time every single month. But the reality of having a rental property is that sometimes tenants do pay late. You need to be prepared to deal with those situations and ensure that you collect your rental funds.
Create and Implement a Rent Collection Policy
Our policy is that rent is due on the first of every month. You’ll have to decide if you want to provide a grace period, and if you do, be sure to include that information in your lease agreement so the tenants know what you expect. We do have a four day grace period, which means tenants will have until the end of the business day on the fifth of the month to pay their rent.
We believe that providing tenants with options for rental payments increases the likelihood that rent will be paid on time. So, we are willing to collect payment through a number of avenues:
- Online portal (our preferred method)
- Cashier’s check
- Money order
- Personal check
Your rental payment methods also need to be listed in your lease agreement so your tenants know how they can pay rent.
Three Day Notice to Pay or Quit
With our generous grace period and our willingness to accept rent in all those forms of payment, we expect our tenants to pay on or before the fifth of the month. When those payments are not collected by the due date, the tenant will be served with a Three Day Notice to Pay or Quit. This Three Day Notice basically outlines that they have three days to either pay us the rental funds that are due, or they can vacate the premises.
If they fail to do either of these things, we will consult with the owner for the next steps.
Evicting a Tenant in Denver
The eviction process is a tool every landlord should be familiar with; you should understand it thoroughly. In Colorado, we employ the use of highly competent and knowledgeable attorneys that will execute the eviction process if necessary. Across our entire portfolio under property management, less than one percent of our tenants need to be evicted. This low eviction rate is due to our excellent screening process and our commitment to collecting rent on time and to working with tenants to recover funds. A non-compatible tenant relationship is not beneficial to anyone, and your ultimate goal is always to collect your rent. Eviction should be the last resort. But, if it does become necessary, we will immediately turn the situation over to our attorneys and then deal from there.
If you have any further questions or concerns about collecting rent in Denver, please feel free to contact us at Walters & Company.