Rent Arrears - how can you eliminate them?
These 3 important but simple steps will help you minimise the risk of rental arrears.

Hello, hello, hello!

Let’s get the started with an extremely important subject this week… 

How to eliminate rent arrears!

Have you ever had a tenant who is behind on their rent and you’re not sure what to do? 

We get calls from landlords who’ve had tenants not pay rent for six months and sometimes much longer.

Often the property is fully managed by an agent but no eviction notice has been served – putting a huge hole in the income and landlords are losing money. 

Let me take you behind the scenes and systems of what we do to ensure things run as smoothly as possible with these three simple steps.

Step One - Everyone Pays Their Rent on the Same Date

Ask all your tenants to pay on the same date, for example the first day of the month. For all of our tenants, the rental period goes on the first day of the month to the last day of the month. 

If somebody moves in partway through a month, then they pay a partial month for the first payment and then the recurring payments go on from the first of the month after that. 

I would encourage you to move to this set up because it means that on one day each you can identify any late payments. 

However you have your payments set up at the moment, the most important thing is to check that the rents are coming in!

Step Two – Make contact

On the first working day all rent payments should have come in, if by the second working day they haven’t, contact any tenants immediately! 

Luke, our Assistant Property Manager,  will send a simple and polite reminder, especially if it's one of our tenants who is usually very good at paying. 

Sometimes it can be a little glitch at the bank or things can go astray. 

The payment is usually made within the same day. 

But when this didn’t happen our process is to follow up promptly.

Luckily, we’ve only had a very small number of tenants we've had to go down a formal procedure of eviction.

Step Three – Help Tenants Move On

You may come across tenants who either can't pay or won't pay.If a tenant is unable to afford the rent, we talk to them and find a way to assist them in moving on - whether that's moving in with family or finding somewhere more affordable. 

We would always ensure we help because people who are in the ‘can’t pay’ or ‘won’t pay’ situation, sometimes have very chaotic lives, and really struggle to move forward.

As I mentioned we’ve only to evict one person through the courts.

With everyone else it’s been by a voluntary agreement, where the tenant can see they can't really afford to live here, so make that decision to move on. And it benefits them because they don’t rack up large debts or have a CCJ against them. 

Whatever options work for the tenants - staying with family or friends, we work with them to find something suitable. 

But in the meantime our procedure is to serve the section 8 notice as soon as we're able to do so, which is when the second month’s rent is due.

Serving the Section 8 means that if a tenant does not honour an informal agreement to move on the eviction process is not set back.

These may be three simple steps, but you’d be surprised how many people are not doing them and they're really suffering because of it!

One final thing I want to touch on is that if somebody leaves and we haven't come to an agreement with them, and they've left owing money, then we would serve pursue a County Court Judgement. And we’d encourage you to also use Money Claim Online to lodge a County Court Judgment (CCJ) against the person so that other landlords and other people can see that this person might be a debt risk or hasn't paid their debts in the past. 

It’s important for people to realise that it's not acceptable to not pay their rent!

These the three steps will minimise your risk of rental arrears, and you certainly won’t have arrears of over 6  months or even year!  

When everything's dealt with promptly, it’s better for the tenant and better for you. 

This process really starts before your tenants move in. See my other post which looks at 5 Signs of a Nightmare Tenant to help when choosing your tenants. Because really if you choose the right tenants, then you have fewer problems at every level. 

I hope you’ve found this useful. 

Do let me know in the comments if you have any questions, I’d love to hear from you.

Bye for now.

Stephanie & Nicky xx

If you want to get started in Rent 2 Rent and take your first step to financial freedom but you're not sure where to start, you're in the right place!

Get Started with our Free Online Training
CLICK HERE for the 5 Secrets to Rent 2 Rent Success

Want to fast-track your success?
Find out more about our Kickstarter Coaching Programme and work with us.
CLICK HERE to book a call with Stephanie

Questions?
Please comment below and we’ll reply!

#YesYouCan

CHECK OUT THESE POSTS TOO…