Property investing has been a bumpy ride for the past couple of years, thanks to the pandemic. Even now, tons of office buildings remain unoccupied-a concerning sign for commercial property owners.
At the heart of the issue is rent collection. As a commercial property owner, you need effective ways to collect rent payments on a regular schedule. What strategies can you employ to make it fast and painless?
In this guide, we take a look at three rent collection strategies for your commercial investment properties.
1. Make Rent Collection Easy
Paying rent can sometimes be a pain in the rear end, especially when using outdated methods like checks. After all, no one likes to pay rent. Making the process more difficult only engenders resentment and frustration.
So, make paying rent dead simple. The easiest way to do this is with a commercial tenant portal, which your property management can help set up. This is an all-in-one hub where they can check their contract, submit maintenance requests, and, of course, pay their rent.
Further, the tenant portal should offer the easiest methods to pay rent. They should be able to schedule automated payments and use modern methods like Visa or a payment processor. If it's easy for them, then it will be easy for you.
2. Crack Down on Late or Non-Payment
Most lease contracts offer some form of grace period. That is, renters can have a few extra days to make their payment without penalty. Unfortunately, this leads to many tenants taking advantage of this to always pay late.
Late payments really hurt you, as you need that money to pay property taxes and handle maintenance or repairs. There's only one way to discourage this sort of bad behavior: late fees. If they keep missing the regular payment dates, then they pay a lump sum or a percentage.
You are not doing this to punish your tenants, but rather to show them that you're serious. Tenants can tell when landlords are pushovers, and they will take advantage of that.
3. Maintain Communication
Sometimes, there's no reason for late payments other than that the clerk or accountant forgot. There is a lot going on in the financial wing of any business. Something small like a rent payment can fall to the bottom of the pile in short order.
So, offer friendly reminders as the due date approaches. You can automate these as either text messages or emails. They give your tenant plenty of opportunities to get it done at the last second.
Take the time to find out why a tenant is making continued late payments. There could be a good reason, rather than negligence or malice. This gives you a chance to work out an arrangement for both parties to fix the problem.
Let PMI Manage Your Commercial Real Estate
Rent collection is the only way to get a consistent return on your investment. Making it easy on your tenants with a tenant portal ensures the whole process is effortless and quick. Always enforce your late payment policy and keep open communication with tenants to iron out issues.
PMI Ancient City manages your commercial properties so you can focus on the things that matter. Get a free consultation to see the benefits of property management.
