Collecting rent is really the “Ground Zero” of managing your rental property. If you are not receiving rent from your Tenant, then you can’t pay your mortgage, do maintenance (at lease not from your rent revenues) . . . . it can put quite a strain on the whole rental property system.
Collecting rent is really one of the main focuses of managing rental properties. After all, if you are not collecting rent, then a whole other set of actions have to come into play, like evictions and so on. But before you get to that point, when your tenants are not paying their rent on time, many times, they need some prodding or “encouragement”. The form of this “encouragement” that I recommend is issuing a “Three Day Notice to Pay Rent or Quit” which, essentially is a threat. I am telling my tenant that if you don’t pay rent within three days, I am going to evict you.
First of all, let’s talk about what the three day notice to pay rent or quit really is; as I said before, it is a threat. I like to think of it more like a promise . . . here is my resolve . . . this is the hill that I am willing to die on. This is my business, and I am sorry if you are having problems paying rent but if you don’t, then I will have to start the eviction process. The Three Day Notice is really much more than a threat or a promise; in many states, it is a legal requirement. In many states you cannot start the eviction process unless you can prove that you have served the Three Day Notice AND three business days have passed since you did serve the notice.
We are all familiar with the mother who makes the ever-familiar threat to her kids: “I’m counting to three . . . don’t let me get to three!”. She is threatening them with who knows what if she should ever get from 2-1/2 to 2-3/4 all the way to three! Just like that mom, we have to be prepared to act on our threat or just save ourselves the effort and let the Tenant be in charge of paying rent whenever they please. This is why I strongly recommend that you have a good relationship with a reputable eviction attorney . . . to back up your threat should you need to.
We have initiated the eviction process many times but followed through all the way to a full eviction very few times. Again, having that relationship with a good eviction attorney is worth it’s weight in gold when it comes to showing your resolve to your Tenants. Keep in mind, now that we have started the process, we have incurred some attorney fees and the Tenant will have to pay his rent, any late fees AND whatever the attorney fees at that time in order to be reinstated and stop the eviction process.
In summary, you will have to show your resolve to your Tenants when it comes to collecting rent. Having a good eviction attorney on your team is a good way to show them you mean business!
To view a short video on this same subject go to: http://bit.ly/du4p43
The subjects of collecting rent, three day notices and eviction are covered extensively in the new Property Management Training Program; Manage to Make Money . . . . the Real Estate Series. This new series has been developed around the book: “Manage to make Money . . . Your Guide to Profitably Managing Rental Properties – 2nd Edition” written by Pat and Kris Larkin.