I was speaking with my handyman today and he gave me a great idea for a blog entry. Let's call him Tom. Tom is a great handyman, however, a terrible businessman. He has several rental properties and makes all the mistakes in the books, then if that weren't enough, he repeats the same mistakes!
One of the mistakes Tom continues repeating is allowing his tenants to pay rent late, or close to the grace period deadline. Here's my tip. Require rent on or before the first day the rent is due, as opposed to allowing the tenant to pay rent on the last day of the grace period. Our rental agreement's rent due date is the 1st of every month with the drop dead date (grace period) the 5th of every month. What we've done is let our tenants know the rent is due by the 1st of every month, and the rent is late on the 2nd. If the rent is not received by that 5th day, the 6th day begins our 3 day pay or quite notice. We go as far as calling the tenant on the 2nd day of the month and letting them know the rent is late. If you allow your tenants to consistently pay rent on the last day of the grace period, you as a landlord are asking for trouble.
Many bills are due by the 1st of the month. If your tenant only has $2,000 toward the month's bills of $3,000 don't you want to be the first bill paid? We certainly do!
I be Joe Lane, the co-owner of The Lane Real Estate Team. The other owner, my beloved wife Colleen, wants nothing to do with the property management side of the real estate business. With five children still at home, I don't blame her. You can call me most anytime at 509.308.5513 | Don't mess with a bald dude!
