Phoenix property management includes collecting rent, and today we are talking about how to be very effective in collecting the rent on time every month. We’ll discuss late fees and the importance of consistency.
Incorporate Late Fees
Incorporate late fees in every lease agreement. The late fees you charge should be reasonable because if you have to take the tenant to court and late fees too high, they won’t be enforced. The judge will cross that part off the amount of the money that’s owed. So keep your late fees reasonable. You should also consider having them graduated. If you charge a $100 late fee on the 5th, there’s no incentive for the tenant to pay on the 6th or the 7th instead of the 12th. But, if you charge $10 a day, they’ll feel it a little every day and the late fee will get higher the longer they don’t pay.
Treat your property as a business. Enforce the late fees and don’t forgive them. The tenant will expect that next month, and you can get into fair housing trouble if you forgive one person but not another.
The Five Day Pay or Quit Notice is the most important form in the rent collection process. If the tenant is late, this is the first form you send. Don’t wait to send this out. It will only make the eviction process longer. Send it the first day the tenant is late. You can keep the eviction process to 26 days when you move quickly. If you are punctual, the tenant will respond better.
If you decide to accept a partial payment because the tenants don’t have all they owe you, you can take a partial payment. But there’s a form you
need called a Partial Payment Non-Waiver Form. If the tenants don’t sign this, then you’ll have to start over with any court process you began. Be sure to use this form.
If you have any questions about forms, late fees, or collecting rent, please contact us at Service Star Realty. We’d be happy to help you with all your Phoenix property management needs.