One of the biggest challenges in a landlord’s business is collecting rent. If you haven’t run into a problem with rent collection yet – just wait, it’s bound to happen at some point. The best way of ensuring you get your rent on time is to carefully select the tenants for your rental units.

Can they afford the rent?

Be sure to complete employment checks and ask for pay stubs so you can get an idea of what they are bringing in. You may not know all of their debts but this can help raise red flags if they don’t have near enough income to afford the monthly rent.

Can they pay on time?

Some renters have developed bad habits and are used to paying late. Why? Because a previous landlord has let them get away with it. Be sure you have a rent policy on paper that applies to all your tenants. Have them read and sign off on it. If they have a history of being late, or have pay schedules that don’t line up with the first of the month, work with them over a two month period to re-align them through a series of step payments.

How to deal with late payments.

Late payments are bound to happen from time to time. Even good tenants have family emergencies or payroll problems with their employer from time to time. It’s important to recognize this and understand that it costs money to replace these tenants. It’s usually easier and more cost effective to work with them to get things paid up.

Make sure your tenants know to give you a call if they are having trouble paying rent. If they feel comfortable calling you ahead of time it gives you more time to work out a payment arrangement. Have a late fee policy that is based on how many days late they are. It should a daily fee to ensure the earlier it gets in the less fees they will have to pay. If you issue a one time late fee of $25 when rent is late it wont matter to them if it’s late a few more days. We have a late fee policy of $5/day for the first 5 days late and $10/week after that. Once rent is late by 5 days we issue a termination notice for non-payment of rent. This lets the tenant know that we’re not kidding around. Once rent is paid in full this notice is automatically canceled (based on NB Residential Tenancies Act, check with your local rental laws).

Make it easy!

Above any beyond all else, make it easy for your tenants to pay their rent. We accept post dated cheques that can be dropped off or mailed to our office, in addition we accept money orders, and Interac debit payments (wireless debit at the door for easy collection). The benefit of money orders and debit payments is that they don’t bounce.

Bounced Cheques/NSF Fees

Bouncing cheques cost money for you and your tenant. It’s important that you tell your tenants to call ahead if they think their cheque might bounce. Although they may get stuck with a late fee, they wont have NSF fees on top of that. In addition to the NSF the bank charges, you should have an established NSF Fee to cover the fee charged by your bank (in some cases banks charge upwards of $50 on each end).

Deposits

Here in NB we have two types of deposits. First and foremost the security deposit and second the rental deposit. The security deposit is always held by the Office of the Rentalsman and it’s best to have the tenant deposit it to them directly (they will mail out a receipt). Rental deposit is collected to hold a rental unit for a prospective tenant and is non-refundable if they walk away (make sure you tell them this). Be sure to return this deposit if you decide not to rent the unit to them. Rental deposits are applied to the first month’s rent.

Too busy to collect?

If you find you’re too busy to collect, hire someone to do it before you. We offer stand alone rental collection for a flat fee. Other providers include accounting firms and collection agencies. To request rent collection service from Harrity Real Estate Services just contact us.

Let me start by saying – if you’re investing in real estate you’re in the business of making money, and that means that when you spend money – you want good value. Right? Right!

If you don’t live near your investment properties, you need a property management firm. That’s the bottom line. If you live in the same locale as your properties, maybe you can get by without our services. BUT- if you’re careful when choosing a responsible property management firm, you will make money off of the services they provide!

Hiring a property management firm keeps things running smoothly and hassle free, for you and your tenants. That being said, not all property management firms are built equally and they don’t offer the same services, or more importantly the same level of service.

When selecting a firm, look for companies that are fully insured. Then, make sure they do all the normal property management duties (collect rents, remit damage deposits, place tenants). Once you’ve narrowed your list down, look for a company that is available 24/7 in case of emergencies. You know it’s crucial that there is someone there at all times in the event of an emergency, but you’d be surprised how hard it can be to contact some companies after hours.

Communication is key! You need a company that will keep you in the loop when something goes wrong, but is decisive enough to take care of the situation without nagging you for instructions. Choose a company who is quick to reply to your emails and phone calls, and happy to share information about their services and prices. You’ll also want to ask what the procedure is if any repairs need to be done. They should provide you with notification of the problem, possible solutions and photos when necessary.  If you’re an owner that just wants to collect the money at the end of the month and let the company do all the work and leave you alone – that’s fine! Just make sure you ask these questions in the beginning – if they have the right answers, then they are probably well organized and will take good care of your property.

Look for companies that are growing and not shrinking. Sometimes a company that is shrinking becomes desparate, and can end up costing you money. Look for an innovative company that is always looking for feedback and suggestions on how they can provide a better service to meet your needs.

Last but not least, look for value added services like online billing, income/expense reports, toll free contact numbers, etc). These things are the icing on the cake, they can make your life a lot easier. Things that are automated like online building, reports, auto attendants save time for the company which means they have more time to deal with any problems that arise (work smarter not harder right?).

Property management shouldn’t only be about collecting the rent, repairs, and tenant screening. The goal of the management firm should be to help increase your income, by improving the rental value of the property and the resale value. They should be able to give you information on both the rental market and sales market.

If you’re looking for property management services in Saint John, we would love to help you out. Just contact us.