Best Ways To Ensure Your Tenants Pay Rent on Time - Article BannerCommercial tenants have their own incentive for paying rent on time: their business depends on it. 

However, even your well-screened tenants can be slow to turn in the rent payment every month. Maybe they’re dealing with cash flow issues or they don’t think it matters when they pay. You need to have a strong lease agreement that sets forth your rent collection policy. You also need to enforce your penalties. 

Most helpful, however, is allowing tenants to pay rent simply and securely with online payments or ACH transfers. 

For more than two decades, we’ve been collecting rental payments on time for our commercial investors in Victorville and the surrounding areas. Here’s what we recommend when you want to set up consistent payments. 

Establish and Enforce a Rental Collection Policy 

Your first step in getting tenants to pay rent on time is establishing a rent collection policy. This should be included in your lease agreement. The documented policy will ensure tenants can’t complain that they didn’t know when rent was due or they weren’t sure how to pay. 

In your rent collection policy, outline a few important details:

  • Make sure the policy says when rent is due. Generally, this will be the first of the month. But, you’ll want to reference what happens if the first falls on a Sunday or a holiday. 
  • Stipulate whether there’s a grace period. For example, maybe rent is due on the first and then considered late on the third. 
  • State the amount that’s due. Maybe you’re collecting additional fees in addition to the flat rent. Make sure your tenants know the total that’s owed. 

Instruct tenants on how to pay the rent, and always list the consequences that come with late payments. Perhaps you’ll charge a late fee when rent isn’t paid on time. 

Once you have a rent collection policy in place, you need to enforce it. Don’t blow off those late fees or accept partial payments. Tenants need to know what’s expected of them and they also need consistency.

Benefits of Multiple Payment Methods

Commercial tenants will have different payment preferences. Some of them might be open to paying electronically. So, it’s in your best interests to accept online rent payments. 

Some of your tenants might prefer to write a check. Offer drop box locations for them to leave the payment, or schedule office hours so they can pay in person. You should also be willing to collect a payment via credit card.

Communicate About Rent

Good RelationshipA good relationship with your commercial tenants will dramatically cut down on late rent payments. Make sure you’re open and transparent with your tenants. Be accessible and available. If a good tenant runs into financial difficulty one month, they’ll want to feel safe coming to you to explain that rent may be a day or even a week late. It’s better if you know about this ahead of time, so you can plan your own finances. 

Don’t let on time rental payments be rare. We can help you establish and enforce a rent collection policy. We can also work with your tenants to ensure they meet their obligations. Please contact us at Preston-Lee Management Company. We’ve been providing commercial property management services in the High Desert for more than 20 years.