How can I encourage my tenants to make paying rent TOP PRIORITY?
Like most of you, when I was in college, funds were tight. Even as an underexperienced money manager, I knew had to prioritize what bills were going to get paid and when. A memory that clearly sticks with me is walking to my car only to discover I had an unplanned expense, a flat tire. After arriving at the tire shop, I added up the cost of four new tires and realized that they were going cost my entire monthly budget. Decision time: I chose to only replace the tire that went flat. Everyday after that I would inspect the three-remaining well-worn, quickly balding tires and skip over the new one. This created a habit for the next four years, replacing only the tires that got my full attention…the flat ones.
Many of our renters are facing a similar choice in today’s tumultuous and unpredictable climate. With layoffs, furloughs, and job uncertainty, there is often not enough money and too many bills or financial responsibilities. They are faced with the choice of paying the car payment or paying the rent. With a new eviction moratorium in place, the choice got easier for many tenants as they see it as a protection for their housing and choose to pay other bills first. It begs the question, “how do I make myself and receiving my rent a priority,” just like the flat tire that stopped my car cold back in the days.
There is a reason saying like “the squeaky wheel gets the grease” and “out of sight out of mind” are as relevant today as the day they were coined. The fact is human beings prioritize so you need to be a little squeaky and stay in front of your tenant at least once a month, whether they are paying you rent or not.
One successful strategy I have incorporated are monthly inspections. After serving the proper notice, I inspect the property on the 25th of the month or five days before rent is due. Here’s my reasoning:
- The 25th is about the date that most tenants start thinking about their rent that is due on the first. They have either just been paid or have a paycheck coming. I want them to see me and remember that they need to pay me, their landlord. I explain to all my tenants, whether they are current or not, that I might have to sell the house if I don’t get rent. I am inspecting so I know what needs to be fixed or updated in case I must sell.
- With more and more people being home from work and out of school, many people have made choices that might be a violation of the original lease agreement. Animal rescues doubled this year due to being home more often and I have a no pets policy. People have been moving in with others to save money and you might even suspect that you have an unauthorized resident. It is not unusual to walk in an see a bong or other drug paraphernalia on the coffee table. If I know what is going on in my house, I have a remedy for eviction for lease violations that the CDC order does not protect the tenants from.
I had one attendee on a Zoom call this week ask if she had to do this? That’s something for you to decide but you must consider, would you rather spend 20 minutes of your time to ensure you are a priority each month, or worry about not being able to pay your mortgage all month?
2020 has been a year where we all have had to work a little differently, oftentimes harder, to assure our continued success. If you want your rent, let your tenants know there are still consequences to not paying rent. Jump up and down and be seen; you are the priority. If you go flat like my tire did, you might end up stranded.
David Pickron is a Landlord and Owner of Rent Perfect. Their Online Lease Agreement allows you to send your tenant(s) a customized lease agreement, electronically & securely. They offer the most accurate & thorough credit & background screening available. Members of National REIA can take advantage of special pricing from RentPerfect; the solution for rental property owners and managers for screening & managing tenants. Learn more by visiting www.rentperfect.com or calling 1-877-922-2547.