Rent Collection Techniques

Tips & Techniques.... Wow, you mean I need a technique? The simple truth is; running this type of business puts you in touch with a variety of individuals and related life styles. A technique (in the context of this discussion) is a method or methodology that produces the desired result; you get paid with minimal discomfort.

Tip: Rental units should be by the Week. Rooms or efficiency apartments can be high maintenance (turnover, collections etc.). Weekly rentals are categorized differently than monthly rentals, do not require a lease and allow for quicker recovery when eviction occurs.

Tip: Advertise wisely, use key words or phrase that conveys exactly the type of person you wish to rent to. Sounds simple and many landlords start out with good intentions only to fall complacent or panicked into taking the first person with the cash deposit. Be prepared to work hard if you start down this path.

Tip: Be prepared. Create a New Tenant Rental Package consisting of a simple rental application, a "House Rules" sheet, state and local landlord/tenant laws sheet, City or Town Assistance (financial) Program information and a separate document, creatively designed to attract high attention, titled Tenant Financial Responsibilities or RENT PAYMENT INSTRUCTIONS. All the "upfront" preparation work will pay-off and create the structure necessary to profitably run this type of business.

Technique: Consistency is key and welcomed by good tenants. Collect all rents In Person every week at the same time. If collections are working like this, great. If not then you need to be creative.

1. Drop by the tenants work. Respectfully and discreetly ask for the rent... do not say anything else... stand there until you receive your rent. Obviously this is not a pleasant approach for the tenant but a discreet approach makes it more palatable and gets your point across that you want your rent, on-time and without games. Stuff happens and the tenant may not have the money on him or her at the moment. If so, ask if they need a ride to the Bank. What ever excuse is given, be persistent and tell you can come back after lunch, in an hour, in two hours etc. The point is to not give in and allow the day to pass without getting your rent.

2. Tenant is not at work. Leave a note in or on the Door explaining you came by to pick up the rent and ask them to call you as soon as they get in. If you attach the note to the door, do it loudly. If you slid the note in between the door and door jam make some noise as you do it. Let all know you are there and let them hear the door close as you leave. -- This being said, make sure you are seen leaving and anyone concerned about who is "on-site" is convinced that you are gone. Wait 10 minutes or so and return from a different direction, unannounced and as "stealth" as possible. Call the tenant from outside their door and listen to hear if a phone rings inside (most tenants will use a cellular phone). If you hear a ring or you hear the ring and your tenant actually answers the phone, tell the tenant that you are at the door for the rent.

Lots of variations are possible when it comes to creatively collecting rent. If you find yourself consistently in this type of situation then something is wrong and you need to re-evaluate your screening and "house-rules" structure. Some landlords may actually enjoy this type of dance between landlord and tenant but most realize how unprofitable this type of collection process really is.

Check back often as I will post additional techniques, tips, real life examples and downloadable forms.

The best source for quality tenants may come from word-of-mouth referrals, or somebody who can vouch for them - so spread the word in your community first. Thereafter you can use the notice boards at the school, sports club, company, vet etc. If you still have no applicants, you can advertise in the community or regional newspaper. Many internet sites offer the opportunity to list your property (with photographs) for a nominal fee or even totally free of charge.

Telephone Tenant Screening Tips:

This is your first contact with a prospective tenant and you can already form a general impression. Make notes during the conversation to attach later to their application form. Confirm the rental price, features and address of the property. Ask their reasons for their interest in your property and for leaving their current place. Ask how many people will occupy the unit and the period of rental they are interested in. The longer the period, the better - you do not want a regular turnover of tenants Ask how close their place of work is and for how long they have been employed there.

The Application Form
The following information will be required:
* Full identification such as ID/Social Security and or drivers license
* Full identification details for additional occupants
* Rental history - current and prior
* Employment details - current and prior
* Credit information such as bank details, car financing details and other credit references such as furniture or clothing accounts
* Permission to verify all details

Tenant Screening Tips after Application

Once you have a couple of applications you can compare them and then verify the details of candidates on your shortlist. Take your time and do this thoroughly! Do not use the telephone numbers supplied on the form blindly (in case his friend poses as his employer and gives him a glowing reference) but use the telephone directory to verify his place of work etc. A vacant apartment does cost you money but a marginal tenant will cost you more in the long run. Do not be influenced by sad stories - if it starts off like this it will most likely only get worse.

Set yourself a checklist by which to rate applicants. You can allocate points to each category that meets your criteria, so if a rejected applicant accuses you of discrimination you can show clearly how another applicant was better qualified. As said before - keep a written record (date, time, subject matter) of all conversations between yourself and applicants and attach it to their forms which will later go into the tenant file.

Encourage rental payments by direct debit order is another of the good tenant screening tips (no more "the check is in the mail") which ensures the rent is paid on time and leaves only the services/utilities bill to be settled separately