One of the biggest factors in determining how successful and profitable you can be as a landlord is the reliability of your tenants. If your tenants are failing to pay rent on time, it can really take a toll on your overall profits and potentially cost you time and money down the track. Managing your finances can become quite difficult if you have part of your expected income that simply isn’t coming in. Rent arrears – or overdue rent – therefore should be avoided at all costs. Let’s take a look at a few of the steps you can take as a landlord to ensure this doesn’t become a problem.
Take time to screen tenants
Don’t underestimate the importance of screening for a suitable tenant that is not only reliable and in a stable position financially, but may be willing to stay for the long term. This is the ideal situation for you, so take the time to find someone that fits the bill; it can save you a lot of heartache down the line. Of course, it’s helpful to check their rent and job history, their salary and contacting the references they have supplied. But it’s well worth meeting with them and getting to know them as a person too.
For more information on how to properly screen potential tenants, please refer our previous post on the topic.
Invest in quality landlord insurance
Given the risk involved on your part, landlord insurance is imperative. Not only does this cover you for things like negligence, liability and damage to contents of the property, but it can cover you in cases where your income is lost as a result of the tenant either not paying or being unable to pay for any number of reasons.
Of course, the level of cover depends on your insurance policy, but many insurance brokers will provide income protection as standard. Good landlord insurance is something of a safety net in case things go pear shaped, but ideally, you’d avoid having to use the safety net in the first place.
Maintain a positive relationship
Resentment between landlords and tenants can build in some cases, for any number of reasons. Ideally, you want to establish a mutually respectful, communicative and transparent relationship. Getting in touch every so often is a good way to do this and makes it more likely that the tenant will feel comfortable sharing any changes to their situation with you as early as possible. If they are failing under financial stress, for instance, you’re better off knowing as soon as possible.
Uphold your end of the bargain as a landlord
As mentioned, if you expect your tenant to be reliable and prompt with their payments, you have to be willing to do right by them too. If you are negligent and put things off for repairs, or if you are just generally unreliable and fail to respond to the concerns of your tenant, resentment can build and this may lead to problems down the track and eventually late payments.
Stay on top of rental payments
Get into the habit of checking your bank account on the day rent is paid to make sure that it has come in on time. If you aren’t doing so regularly, you run the risk of having to chase up rent weeks or even months afterwards, which just further complicates the situation and can be very stressful. If you notice that rent hasn’t been paid on the day, a friendly reminder message is a good way to get to the bottom of the situation.
For more advice managing a rental property or to discuss landlord insurance quotes, speak to the team of experts at SGUA today.