How to Get Chronically Late Tenants to Pay Their Rent on Time

Get Late Tenants To Pay Their Rent

New tenants can be a bit of a gamble. Someone may have an ideal rental history, but there’s no way to account for changes in financial status or other factors that could affect their future ability to pay rent. The only way to know for sure how reliable they’ll be is to give them time to prove themselves. Most tenants make every effort to pay their rent on time, while others consistently push the limits of the due date – and your patience. How can you get tenants like these to pay their rent on time?

  1. Ask them about payday
    Many people live paycheck to paycheck, which can make the days leading up to payday financially difficult. If your rent is due a few days before the tenant’s payday, rather than after, it could make your tenant’s rent late simply because they haven’t been paid yet.

    Try talking to your tenant about when their rent is due and offer some flexibility. By adjusting the date their rent is due, you may solve their chronic late payments. You can also prevent this from happening with future tenants by adding the question about payday on your tenant applications. By setting your rent due dates around tenants’ paydays, you’ll increase the chances of getting paid on time and your tenants will likely appreciate your consideration.

  2. Offer online rent payment
    People make online payments for just about everything now and many younger tenants prefer the convenience of it. Online payments make it easier to pay rent immediately, which increases the chances that your tenants will pay it on time. Many online payment platforms also allow tenants to set up rent due date reminders or to schedule recurring payments.

  3. Late fees
    The question of whether to be flexible on late rent payments is a valid one. On the one hand, tenants are more likely to stay at a property where the landlord or property manager is willing to work with them to find solutions that work for everyone. However, you may also look at your policies and realize that they’re too flexible. If you have tenants who are taking advantage and are consistently paying their rent late because there are no consequences, you may want to enforce late fees.

    Charging an additional fee for rent can help motivate chronically late tenants to pay on time. The rules about how much you can charge vary from state to state, so you’ll want to check your local laws. If you decide to enact a late fee for rent, you’ll need to include a clause in your lease. The clause should clearly outline how much the late fee is and when it will be applied. Be sure to mention it when you go over the lease with your tenants. If the late fee wasn’t included in the lease, it’s not legal to impose one after the lease has been signed.

  4. Offer incentives
    Another tactic that works well with getting tenants to pay on time is to incentivize early or on-time payments. Here are a few types of incentives you could offer:

    – Give them a small discount if they pay their rent 10-15 days early
    – Set aside $10 every month the tenant makes a payment on time. At the end of the lease, use the money to buy them a gift card
    – If they pay rent on time for a certain number of consecutive months, you can offer them a percentage off their next month’s rent
    – Offer to not raise the price of the rent if they make 12-consecutive payments over the course of the year.
    – Make your rent higher from the beginning and give them a discount for on-time payments

    Incentives can be very effective with the right tenants because they offer positive reinforcement for good behavior rather than punishment for bad behavior.

  5. Report late payments to the credit bureau
    If you’ve tried other methods and are still having an issue with a consistently late tenant, let them know that you’ll report the late payments to the credit bureau if they continue. In many cases, the threat alone will be enough to motivate some tenants. If they continue to pay their rent late, report them.

  6. Send a “pay or quit” notice
    Most states require landlords and property managers to send a “Notice to pay or quit” when a tenant fails to pay rent within a certain time frame – generally around 3 – 5 days. If the tenant doesn’t pay the rent within the time period, they legally lose their right to occupy the property and must vacate. If the tenant refuses to leave, you’ll have to proceed to eviction.

    Eviction is a lengthy process that can end up costing you more time and money than it’s worth. However, if none of the other methods have persuaded your tenant to pay on time, it may be worth considering – particularly if their consistent late payments are causing financial issues for you. Eviction laws vary by state, so you’ll want to make sure you’ve reviewed your state’s laws to make sure you’re taking the proper steps and following all legal requirements.

Consistent late rent payments can cause a lot of stress for you and your tenants. In many cases, open communication and a clear lease agreement that covers the details about rent – when it’s due, the penalties for late payments, the incentives for on-time payments, and the actions that will be taken if the issues become chronic – will be enough to keep most tenants in line. Go over your lease in person during the lease signing to make sure the tenant understands your policies. Thorough screening of applicants will also help you select tenants with a good rental history who are more likely to pay on time.

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