One of the most common and concerning issues landlords face is when a tenant doesn’t pay rent on time. According to the Joint Center for Housing Studies (JCHS) of Harvard University, missed rent payments are among the major concerns for landlords.
Whether due to financial hardship or a renter’s negligence, handling tenants who fail to pay rent can be difficult and stressful. In this article, you’ll learn helpful strategies for effectively managing a tenant not paying rent to minimize your stress and ensure tenant accountability.
Typically, rent is considered late when it is delivered past the due date outlined in a lease agreement. However, certain circumstances may cause a delay and make it seem as though the rent is late when it is not:
One strategy landlords often employ to give tenants more time to make rent payments is by offering a "grace period." A grace period enables a tenant to pay without late fees for a short amount of time. For example, landlords may offer a three-day grace period in which tenants can pay rent up to three days after the original due date without incurring any charges.
A grace period can help prevent disputes and legal action by giving tenants more time to pay their rent without fear of eviction or loss of deposit. It also removes the stress of penalizing late rental payments immediately, allowing landlords to maintain good relationships with their tenants by being understanding and flexible when dealing with financial hardship.
On the other hand, offering a grace period can create more work for the landlord, as they will have to track all rental payments. If rent is late, landlords may need to complete additional paperwork and communications to ensure payment.
Also, landlords should consider what kind of message they convey to their tenants by offering a rent grace period. If not handled properly, it could lead to tenants relying on this leniency, ultimately causing landlords more grief when dealing with future late payments.
If you're a landlord who has experienced non-payment of rent from a tenant, you know how much of a headache it can be. That’s why it’s essential to be aware of the best practices and options available when this happens so you don't end up in an even more difficult situation.
Here are some tips on handling late-paying tenants:
Most landlord insurance policies don’t specifically cover unpaid rent. However, landlords can get rent guarantee insurance at extra cost. Rent guarantee insurance is a type of insurance policy for landlords that covers the rent when it is not paid by tenants. Unlike most insurance policies that cover rent that is missed out on because of external factors like fires, a rental guarantee insurance policy works when rent is not paid because the tenant stops paying.
Landlord insurance typically provides coverage for other issues, such as:
As with any insurance policy, read the fine print to understand exactly what your landlord insurance covers—from unpaid rent to other liabilities.
You should also consult a qualified insurance provider like Obie to ensure you have the best coverage for your specific rental needs. With the right guidance, your landlord insurance policy can protect you from financial loss due to unpaid rent and other liabilities associated with being a landlord.
Keeping your tenants up-to-date on their rent payments can pose a challenge for any landlord.
To help, here are six tips you can use to get your tenants to pay rent on time. From establishing clear tenancy expectations upfront to offering incentives, these tips can help keep you and your tenant aligned so you get paid on time each month.
Maintaining a good relationship with your tenants important—especially when it comes to collecting late rent payments. Once you notice the rent is late, communicate expectations with your tenants in a professional and consistent manner.
By following these tips, you'll be better prepared to manage tenants who aren’t paying rent on time and ensure you receive the rent due each month.