Lets face it. We are landlords primarily for the economic benefits. It is not really a job that people do for pure pleasure. Plus most of us have financial obligations like mortgages that are associated with our rentals. That is why it is very important to have tenants paying in a timely fashion.

In the words of Mr. Roper from the 70’s hit TV show Three’s Company:

Stanley Roper: I want my rent!
Helen Roper: Stanley, where are your manners? You’re supposed to say hello when you walk into a room.
Stanley Roper: Hello, I want my rent!

You can have the best relationship in the world with your tenants but it is worth nothing if they are not good payers.

Firstly, don’t let tenants get into the habit of paying late. If you do allow it it becomes a snowball rolling downhill. I had a tenant who was paying on the 5th. Soon it became the 10 and then the 15th. “That is when I get paid” She told me handing me another late rent check. She now expected that she was allowed to pay late. She never did catch up and ended up leaving and owing me money.

Interestingly enough the law sees it that way too. If your tenant has a history of paying late you are essentially giving them permission. At least this is the case in my town.

Secondly, make it as unpleasant to pay late as possible and bring on the unpleasantness as soon as possible. In my town, there is no grace period so my rent is due on the 1st and a penalty exists after. If the tenant is a couple of days late I contact them. If it is not resolved I post a three day notice. And so on and so on….

It sounds rather harsh I know. The net result for me is that I have gotten some lazy payers to pay on time. They make me a priority and our relationship is better. My mother in law has a tenant who is always months late and has been for years. She is always having to call and hound them. It is uncomfortable for both parties.

Thirdly, I make it as easy as possible to pay on time: local drop box with weekend hours, online same day service, post dated checks for advanced payment etc.

I start the initiation during the lease signing. I outline the dates and the penalty. It is amazing how many people are not paying attention at this point. About 10 percent seem to need the follow up. Interestingly enough, it doesn’t correlate to the quality of the credit either.

While this may seem very hard core, the end result is more efficient use of time and resources and leads to better tenant landlord relationships. It is well worth playing the heavy.