The cost of living in Denver, Colorado, is 27.6% more expensive than the national average in the United States. It's also almost 6% higher than the state average.
Because living in Denver can get expensive, there are a lot of renters. This provides a huge opportunity for rental property investors to generate passive income.
Your rent collection strategy will define whether or not you get paid on time. Keep reading to learn five tips to implement.
1. Implement Payment Software
Rent collection is much easier when you implement payment software. Paying rent online is the modern way of doing things because it provides landlords and tenants with an efficient and convenient process.
It's easier to store and track rental payment records with an online platform, such as a tenant portal. This program sends tenants automatic payment reminders to ensure a consistent rental income.
2. Set Payment Terms
Without clear payment terms for your rental property, tenants may fail to pay rent on time. In your lease agreement, payment terms, grace periods, and late fees should all be outlined.
Colorado laws state that you must offer tenants a 7-day grace period before charging late fees. Mention your policy for security deposits in the lease agreement as well.
Give the tenant a chance to review the terms and ask questions before signing. This is the best landlord advice if you want to avoid future disputes regarding rent collection.
A signature from the tenant makes the document legally binding. You'll have evidence they agreed to rent payment terms if you have to take them to court for nonpayment.
3. Stay Consistent
Your rent collection policies should be fair so that you can maintain a good relationship with your tenants.
Staying consistent and fair throughout the tenancy can protect your rights and the rights of your tenants. Your rules for rent collection must be consistent for every tenant to avoid a discrimination lawsuit in Denver.
4. Offer Payment Options
Another great thing about implementing rent collection software is that tenants have multiple payment options. Offering flexibility makes it more likely that your tenants will pay rent on time.
If tenants don't want to pay online because they aren't well-versed in technology, you might allow them to pick a method that suits their needs. This can keep tenants happy and increase the chances of lease renewals.
5. Offer Open Communication
Communication is the foundation of any great business, and running a rental property is no different. Communication should be at the forefront of your relationships with tenants.
If you can't be available to them, consider hiring a property management company. Professional property managers can handle tenant relations, including reminding them about payment due dates.
Rent Collection Strategies That Work
Every landlord is different, but implementing these rent collection strategies can work for anyone. Rental income is the basis of your business, so it's important that you receive rent payments on time.
If you can't foster close relationships with your tenants, let us help. PMI Elevation helps Denver landlords like you with full-service property management tasks.
With state-of-the-art technology, we can transition your manual rent collection process to a digital one. Ready to put these strategies into motion? Contact us today to learn more about our services.
