Tenants falling into rent arrears is probably most landlord’s worst nightmare – particularly in these days of diminishing profits due to the unfair tax burdens placed upon you by the treasury. And the time it takes to get non paying tenants evicted through the courts.
Here are three top tactics you can use:
1 Contact them immediately, the day after they fail to pay.
So for example if they pay by bank transfer, check your bank account on the day the payment is due to go in and email them the next day if the money’s not there.
Do this every time they fail to pay when they are supposed to. So they know that if they are late – they will get an email from you about it.
Generally, when people are in financial difficulties they tend to pay the person who shouts loudest. So if they know that you are going to be onto them if they don’t pay – they will often pay to avoid this happening.
2. Make it easy for them to pay
Most tenants pay by standing order, so make sure it is easy for them to set this up by providing all the forms etc.
However if tenants do fall into rent arrears, consider making it easier for them to pay there and then when you visit them.
For example, it is possible to get card readers for your PayPal account. Why not carry one with you and then when they say they are able to pay you £100 (or whatever), whip it out and ask them to do it there and then.
Also – you should NEVER refuse to accept payment when it is offered. Don’t insist on them paying by a specific method either – standing order or whatever. A rent payment is a rent payment is a rent payment.
You don’t want them defending a claim for possession based on rent arrears by saying “Well Your Honour, I offered to pay but they wouldn’t accept it”.
3. Put them under an obligation
In his seminal book ‘Influence: The Psychology of Persuasion’, Robert Caldini gave ‘reciprocity’ as one of the six main principles which influence people’s actions.
So if you have been particularly helpful and kind to your tenants – they will be more likely to put their rent first when push comes to shove. They will not want to let you down.
Although, I have to say that there are exceptions here. Some tenants, the worst ones, have no sense of obligation and will fail to pay however nice you are to them. The only thing to do with these people is spot them in advance and never rent your property to them!
There is also the problem of Local Authorities telling tenants to sit tight whether they can pay or not, or they will lose all chance of being re-housed. Which is an unhappy situation for both landlords and tenants (who would often rather move out but feel constrained to stay).
A bit of psychology doesn’t hurt when trying to get your tenant to pay you first out of a limited budget!
Do YOU have any top tips for getting recalcitrant tenants to pay up?