3 Ways To Deal With Tenants Consistently Late

Tenants being consistently late with their rental payments can be incredibly frustrating for landlords. Late payments can affect budgeting and cash flow which can cause landlords to pay operational expenses late themselves, or have to cover those costs out of pocket.

Below we’ve gathered three ways landlords can deal with tenants being consistently late, in order to maintain consistent cash flow.

Have a Conversation with your Tenant

Communication with your tenant is incredibly important when it comes to late payments. Assuming landlords did their due diligence in screening the tenant prior to signing the lease, consistent late payments may mean their financial situation has changed. While this can be frustrating it’s rarely beneficial to take out these frustrations with the tenant, especially if the tenant had an otherwise great record.

A simple phone call or series of text messages can help landlords understand their tenant’s situation. If they’re having a temporary financial crisis, consider offering more manageable payment installments over a set period of time. Creating a payment plan may seem as though you’re leaving money on the table at first, however in the long run you’ll ideally recover the initial amount, and have a satisfied tenant which can lead to more consistent income from a long term tenant. 

This can not only help them get over their financial troubles quicker, it can foster goodwill with your tenants. This can result in more consistent income going forward. Encouraging open communication serves multiple purposes, tenants feel as though their concerns are taken seriously, and landlords build rapport while learning valuable insights on their tenants as well as solutions going forward.

Set Monthly Reminder

Sometimes tenants are late for non financial reasons, some landlords send out rent reminders a few days or a week before rent is due. This can be in the form of a text or email that reminds tenants that the rent is coming up. Remember to be professional and courteous, as this is meant to be a friendly reminder and not a harsh demand to pay on time. Although it can seem like a lot of work to send monthly reminders to tenants, especially if you’re a landlord with multiple units, remember there are tools to automate this.

If your tenants are still consistently paying their rent late, consider an additional notice reminding them of the consequences agreed upon on the lease agreement. This reminder should state clearly that the tenant is late on their payment, including additional fees incurred as well as the new total amount owed. Additionally, state what will happen if the rent isn’t paid in full, and include a way for the tenant to contact you in case there are underlying reasons for why they’re paying late. This notice opens the opportunity to work out a payment plan, while also serving as a formal record of late payment that can be used if legal action is required.

Take the Legal Route

Eviction should be the last option a landlord takes, as this process is time consuming, financially draining and legally complex for those who lack the legal resources. Many landlords will first opt to serve a pay or quit notice, which is a legal notice demanding the tenant pay the rent in full or immediately vacate the premises. This notice indicates the amount of rent due, applicable fees, a payment deadline as well as consequences for not paying in full or vacating the unit. Due to the pay or quit notice being part of eviction proceedings, it's a good idea to consult with legal experts to ensure the notice is correctly written and served to your tenant.

Depending on a variety of factors, an eviction can cost landlords in California as much as $5,000 dollars which is why it should be reserved for extreme cases. In these cases, some landlords may consider offering the tenant a small payment to leave the premises rather than going through an eviction process though there are risks involved here too. 

Once all avenues have been exhausted, then a landlord may decide to begin eviction proceedings. Though this can be a lengthy and complex process which may require landlords to invest in experts in the field, since even accepting partial payment while a tenant is being evicted can require a landlord to start the eviction process all over.

Although it can be frustrating to deal with inconsistent tenants, it’s oftentimes financially more rewarding to aid a tenant then to go with the legal route. If you’re having difficult tenants or if you need help managing your Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online.