Investing in rental properties, or renting out your home, is a great idea if you want to add to your income, but if you haven’t taken advantage of hiring a professional Issaquah property management company, then you might still need more information before you start renting your property. One major item that you have to consider is your rental collection policy, which details how, when, and in what ways you will receive the rent each month. You also have to settle on how you will enforce your rent, and then write everything into your rental contract.
Choosing a Due Date
The first step to creating your rental policy is to choose when the rent should be due. Most people go with the first day of the month. You can also choose the 22nd, which is the second date when people on public housing assistance get their checks.
Payment Methods
Many businesses accept direct deposit, but you should avoid this unless you have a dedicated, business bank account set up. Checks or money orders are usually the most preferred payment options but online bank transfer payments are becoming increasingly popular. Most online money transfer services like PayPal take a percentage, so it is better to avoid them.
Paying the Rent
You have to set aside certain hours when you will be available to accept or process rental payments. You can hire a secretary or accountant to process for you, and then set the hours, such as between 12 and 5 on the first of the month. You can also allow tenants to send their payments in via registered mail if they are not available to make the hours you choose, but it is important that it is registered with proof of delivery required.
Using Rent Notices
Rent notices are a great way to ensure that no one is accidentally late with their rent but some tenants may be annoyed by them. If you accept automatic bank billing services then you do not have to use them. Rent Notices are usually slipped into mail boxes or under doors on the 30th of the month to remind tenants that their rent is due the next day.
Receipts
It is important to issue receipts for each rent payment. Tenants who bring a check in can usually just get one right away, but mail in options are more difficult. You can choose to mail the receipt back or slip it into their mailbox depending on your preference.
Dealing with Arrears
Arrears or people who are delinquent and late on their rent is one of the most important things to cover in a rental policy. You have to outline how long someone has before they are given a notice, how long before a second notice, and then how long before you take action. The best policy is to send a reminder within two weeks, or one at one week, and a second at two weeks. In this case it is important to send every correspondence via certified or registered mail so that you can use it for legally evicting the tenant should they not respond or pay the rent. It is also a good idea to keep legal copies. A good policy is to accept half of the due amount up front, and then the remainder within 30 days or at the next rental due date. Finally, if you do not receive payment within thirty days, most landlords choose to begin the process of evicting the tenant.