As a landlord rent collection can be hard, but it is the most important job you have. Post dated cheques are still one of the most common ways of paying rent and while you pray it won’t happen, you will probably encounter at least one instance where a tenant’s check has bounced. Here are ways to handle bounced checks and steps to take in order to prevent this from happening in the future.
After you determine that the tenant’s cheque has bounced, you need to decide whether you will continue to accept cheques from this tenant. If you require an alternate rent payment method, you need to determine what will work best for you. Unfortunately, the old saying cash is king doesn’t always ring true. Accepting cash from tenants can be risky and becomes hard to track. While it ensures that you get paid, having tenants pay in cash will ultimately be harder on you. A way to eliminate this is if you have your tenants pay online using their credit cards or have the funds withdrawn from their bank accounts. This way you don’t have to ever worry about a tenant’s cheque bouncing, and rent collection is much simpler for both parties.
Determine the cause
Sometimes bad things happen to good people and the tenant may not even be aware that their cheque had bounced. Rather than immediately starting the eviction procedures with a good tenant, it may be wise to speak with them first. Since the tenant has signed a lease and entered into a contract, they are obligated to pay the rent. Having strict language in your lease regarding late fees, insufficient funds etc. will clearly lay out the consequences for the tenants. If you think that this was not an accident and they may be unable to pay their rent in the future, then absolutely start the eviction process. In the end, you need to protect yourself and your business.
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