Unfortunately, there are a lot of tenants who live beyond their means. A large car repair bill or unexpected medical bill can cause a large financial hardship to a significant amount of tenants. What do you do with these tenants?
Every tenant will be different. There are a few general rules you should stick to. Never let any tenant get passed the end of the month without paying the full rent. It is alright to provide some flexibility to tenants, but there should always be a clearly stated limit to your flexibility.
We hear stories from owners all the time of how they didn’t receive rent for many months before they removed their tenants. Two, you must require your tenants to clearly state their current predicament while also giving you a detailed explanation on dates of future rent payments and amounts. The tenants need to come up with a payment schedule and stick with that payment schedule.
You must also be a detective in these situations. If this is a common theme for a particular tenant, it might be time to ask them to move. You are not a bill collector, and if tenants are paying late on a regular basis, history will tell you that this will happen time and time again.
You also want to talk about alternative solutions with your tenants if they are struggling to pay rent. It might be an uncomfortable conversation, but you need to suggest they explore other options such as borrowing money from their family or perhaps move out ASAP. Waving a 30-day notice so they can move sooner might be the best way to solve this situation.
Most people mean well and have every intention to pay back rent. It is your job to evaluate the situation to see if this will be possible.
Related: Choosing The Right Tenant
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