The theory of being a landlord is simple; you purchase a property, let it to some willing tenants, let the rent roll in to cover the mortgage payments and eventually sell your property at a profit. Of course, in practice it is far from simple and even the most unlikely things can become complicated. One of the most common areas landlords with tenants comes across is chasing rent payments. A survey last week conducted by Templeton LPA shows that it’s more and more common that tenants are falling into arrears.
Find out the problem
There are a number of reasons why tenants may fail to pay up. The most common, in times like these, is that your tenants simply don’t have the cash to pay. This is a real possibility and as a landlord it’s important to communicate with your tenants and find out if this is the case. However, if you don’t receive your rent on time it’s not to say your tenants are automatically struggling; it may simply be that there was a problem in making a bank transfer. Talk to your tenants and find out what’s really going on.
Deal with it appropriately
If your tenants are struggling financially don’t immediately assume the worst and give them their notice; make sure you talk the situation through. It may be that your tenant has found a new job in which case they’ll be able to pay in full next month. Be reasonable and as flexible as you can but if problems persist it is worth considering whether your tenants are really doing you good business.
Take steps to ensure you are covered
The pressure is on you, as a landlord, to pay up your mortgage and any costs associated with your property. If you’re unable to collect your rent on time this might jeopardise your ability to pay. Think about taking out Rent Guarantee Insurance which can give you a little extra leeway on payments or consider whether you’re able to amass some savings to give you a financial barrier in an emergency.
It’s important to take into account the full picture when collecting rent and, at the end of the day, tenants failing to pay is damaging to your business. Make sure you try to sort out the problem civilly, first and always make sure you are covered financially.