It is the second of the month. Today is the day I input all the rent payments to find out who has been naughty and who has been nice.

After the tally, there is usually one person missing. What next? Immediate phone call. Very friendly. “There may be a problem. Just checking. Not like you. Did not get your rent payment”.

Hopefully I get a call or text back immediately. I am flexible. Sometimes it is a new pay period or an unexpected expense. I get a date when the rent will be paid and I make it clear that this is a one time occurrence. Then I thank the tenant profusely. Everyone needs to feel good going forward.

What if the tenant tries to give me the slip and doesn’t return my call on the 2nd? I am always quick to go to the three day notice. The three day notice says I am very serious and the rent is due on the 1st. Of course, there are different regional restrictions that require landlords to give grace periods but not in my town. The rent is do on the 1st with no grace period. If someone doesn’t pay me on the 1st and gives me the slip on the 2nd then on the 3rd they will get the three day notice and begin the eviction process.

Excuses. If I get a call back from the tenant immediately, I am very sympathetic but if I give an extension to the 10th, there needs to be communication in advance about the deadline. I need to have the rent in my hand at the close of business on the agreed upon date. Period.

This all sounds hard core but I have seen too many people fail in real estate because their tenants have fallen on hard times. Being tough on your tenants may seem unpleasant but you need to “man up” to make your business successful so you can continue to provide great housing for people.

The alternative is grim. Tenants get the boot because the landlord can’t pay the bank. Real estate cash flow can be tricky because there are frequent unexpected expenses.

My 1st rule of thumb. Get the tenants paying on time.