What is Our Rent Collection Policy?
As a landlord, one of your biggest concerns comes around collecting rent. This is another example where a professional property management company can be invaluable.
When you are responsible for rent collection, it can be tempting to allow some of your residents to bend the rules a bit. Especially when you are the owner and interacting directly with the residents. In the case of property management, however, it must be run strictly as a business and rules must be followed. We have very strict guidelines for when rent is due, when the late rent is applied, and then when eviction processes begin.
At Cincinnati Real Estate Group Property Management, our rent is due on the 1st of the month, late on the 5th, and eviction filing begins on the 10th if we still have not received the rent.
We utilize Buildium as our online platform for our residents to pay rent. The rent can be paid through a direct deposit that can be setup as recurring payments or paid by a credit card. We encourage all of our residents to set up their payments so it is pulled directly from their bank account, deposited directly into our brokerages trust account, and setup to auto-pull each and every month. This is the "set it and forget it" approach that is 100% a win-win-win situation. Win for our residents since they never have to worry about paying late fees. It is a win for our clients since they are guaranteed to get their rent. Then it is a win for us the property manager since we do not have to spend ample amounts of time contacting all of our residents to make sure they put the check in the mail and wrote the right name on the check.
For many of the new clients we begin working with who inherit residents from a previous owner, we typically find they are not paying online. For some reason, many landlords in Cincinnati do not require or encourage an online payment system. I think it is partially because they are not familiar with the technology out there and also because many are set in their ways. When we do inherit residents, we absolutely will still collect checks if that is really the residents only option (no computer or smartphone for example). We encourage them to pay online, but in some situations that does not work.
If we do not receive rent by the 5th of the month, we execute our late fee. Our late fee is 10% of the monthly rental rate. At this point we reach out to the residents and notify them they're going to be getting a late fee tacked on to the rent due and if we do not get rent in five more days they will be evicted. It sounds harsh, but it is in our fiduciary duty to always do what is in the best interest of our clients, the home owners and investors.
This is an extremely strict policy we abide by and do not make exceptions for this. If the rent is not collected by the 10th, the eviction process begins.
If collecting rent gives you rental angst, you should most definitely look into hiring a professional property management company in Cincinnati.