Few tasks are more important than collecting rent. When you can’t collect rent on time and in full, you lower the value of your time.

Collecting rent shouldn’t require hard effort. You deserve to have tenants that pay the rent promptly and without issue, save for the occasional exceptional circumstance that might arise.

If you utilize a property management company for rent collection, you won’t have to worry about creating or perfecting your protocols. However, if you’re flying solo with your landlord duties, it may be time to tighten up your ship.

1. Tight rent collection gets you paid faster

When your rent collection protocols are strict, you get paid faster. If paying rent is a casual event without a strict due date and non-negotiable late fees, who knows when you’ll get paid. You’ll get paid when your tenants feel like sending you a check.

Your tenants need to know when the rent is due and that the due date isn’t negotiable. You can implement a standard 3-day grace period during which rent isn’t considered late until three days past the due date. You don’t want your tenants to feel like they can put off paying rent without financial consequences.

When tenants take late fees seriously, they don’t dawdle. They’ll pull money from their savings account or borrow it from a friend to pay rent on time in order to avoid the late fees.

On the other hand, when tenants either know or believe you won’t apply late fees, they’ll give you partial rent or wait for their next paycheck without a second thought.

Create your expectations early and reinforce them often

A tight rent collection protocol begins with the expectations you convey when your tenants sign the lease. You can’t shift easily from lenient to strict. If you set a causal, “anything goes” tone with your tenants, making a change later on will be more difficult.

Be adamant about due dates and late fees from the start to make sure your tenants know you don’t accept excuses. Never allow a tenant off the hook for late rent.

If they can’t pay in full, work out a payment plan. Same goes for late fees. Work with them until you can agree on a payment plan, and don’t give them a free pass or they’ll expect that leniency to continue.

2. Having lax rent collection rules can lead to other problems

If you’re casual about collecting rent or you don’t pursue the late fees outlined in your lease, your tenants will walk all over you. This can turn up in ways that go beyond late rent

For example, you might end up with tenants who start harboring exotic petsLinks to an external site. or amass too many cats. If pets are not part of the lease, or they require a deposit, your tenants might assume they don’t need to get your permission.

This can extend to other issues like making their own repairs, having loud parties that disturb the neighbors, or breaking other random lease terms.

3. You want consistent cash flow

Collecting rent on time and in full is going to ensure a consistent cash flow. If you’re working with a property management company, you’ll have an advantage here.

Your tenants will know your property management company is obligated to enforce the lease to the letter. They’re less likely to pay rent late when dealing with a third party as opposed to writing a check directly to you.

4. You want to avoid evictions

Although nothing is guaranteed, running a tight ship in terms of collecting rent is an excellent way to avoid evictions. Certain people get lazy and end up getting evicted when that didn’t need to be the case to start with.

Plenty of people will bend the rules whenever they see an opportunity, but they’ll behave if the rules are strictly enforced.

Evictions are not only time-consuming and costly, they are actually lawsuits. If you perform an eviction incorrectly – even making just one mistake – you could lose the case.

Tenants have many rights and are highly protected in many states. Unfortunately, even when a tenant is in the wrong, if you don’t follow your state’s eviction process to the letter, you could lose your case and your tenant might file a successful countersuit.

Avoid losing control of your cash flow

If you struggle with setting strict terms and following through with your rules, you may need a property management company to work on your behalf. It’s not worth sacrificing your cash flow to “be a nice person” to tenants who are taking advantage of you.

There will be times when you’ll want to extend grace periods and waive fees for your renters. There’s nothing wrong with that when the circumstances warrant an exception.

However, there is a fine line between being generous and allowing others to take advantage of you; and it can hard to tell the difference.

Handing the reins over to a professional property management company is the best way to preserve your cash flow now and into the future.