The most important task for a property management company is collecting rent. So make sure to do anything in your power to have your clients put their monthly rent as their number one financial obligation. That means when they move in, it should be understood where the rent payments are to be sent, what date the rent is due by, and that late payments will not be acceptable. To impress this on them, call them, or send a correspondence a week before the first month's payment is due as to how much is to be paid, where to make the payment, and the last day they can make the payment without incurring a late fee.
Make rent payment as easy as possible for the tenant. Besides a mailing address, Mister babache they should also have a place where they can drop of payment. Many times clients might want to pay with cash, and being that it's a bit of a hassle to get a money order, stamp etc, they miss the payment deadline. Then, they spend the cash on something else, and to whole problem gets started. Some landlords even have websites to accept credit card payments. It could run 2.9% or so in credit card fees, but they might wind up better off because they have less tenants falling behind, and less legal fees in the case of eviction. Another overlooked simple tip. Self addressed envelopes that are already stamped. Even if you saved only one or two tenants from falling behind, it's a worthwhile investment.
As any well run property management company knows, record keeping is a must. You have to keep all communication you have had with your renters on record. Everything has to be dated. In the worse case scenario of going to court for an eviction, this will be crucial. As hard as it sounds, no matter what the situation is, as soon as the tenant missed a payment, a letter should be mailed to the renter. The letter should have a late fee attached. Be firm on the late charge. It's a great incentive to stop them from being late again. If you're a landlord, you should arrange with the property manager that you get to keep the late fees. This will keep them from letting the rent go an extra day so they can collect the fee. You want to make sure that the renter keeps the "I must pay on time" mentality.
Before we go onto the next procedure, I want to point out that never should there be any arguments, shouting or verbal threatening. It's unprofessional, unproductive, and you can wind up with a black eye, or worse. Stay calm, and don't get personal. If the situation looks like it's going to be explosive, just use written letters and calls and forgo the personal confrontations. The main thing is to explain to the tenant that the same way he has to pay his bill not to get evicted, you have to pay your mortgage not to lose the building.
The next step is to keep sending notices as long as rent is not paid. Again, make sure everything is dated, and you have a copy of all letters sent. Many states, such as New York, require a landlord to serve a "notice to quit" to the tenant. This states that the renter should leave the premises (quit), or pay the late rent. Usually it gives 30 days to comply. I'm sure you know that you cannot evict a tenant yourself. If you tried, you could wind up in jail, and get fined to boot. Furthermore, if you changed your locks or turned off heat and/or electricity in an attempt to evict someone, they can bring an Illegal lockout proceeding against you in Housing Court. You can either hire a lawyer to start eviction proceedings, or try going about it yourself by filing a nonpayment petition in Housing Court.
Jacob Eisenstein is the owner of EK Realty LLC, a NYC property management company that specializes in New York real estate management. Jacob lives in Manhattan, NY, and has been doing property management in New York for over 22 years. His website is http://www.ekrealestatemanagementny.com
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