Always collect all of the rent, all of the time
As an experienced landlord and property manager I have learned that as much as you try, you do not always collect all of the rent, all of the time and on time.
When I first started out and only had a few units to look after, I was determined to get all the rent, all of the time.
The story I am going to share with you involves a tenant that came with a building we purchased.
One particular day I went to collect rent from this cash paying client (something we would never do now). I knocked on the door and she was not home. I asked another tenant in the building to call me to let me know when she shows up, so I could come back right away and collect the rent.
The call from the other tenant came in, so I headed there immediately. The tenant had most of the rent, but was short $5. I told her, that I had a 100% collection rate and based on principal, I would need the other $5.
She said she would see what she could do and to come back in an hour. I left and came back an hour later. Sure enough she had the $5. It was in a sandwich bag and consisted of various dimes, pennies, quarters, loonies, pocket lint etc… The great part was that I had the rent paid in full, which maintained my track record.
The next month I showed up to collect and was faced with a story of not being able to get to the bank on time. I asked which bank she dealt with and she described a location that would be a one hour walk or a bus trip to get to. This particular tenant did not have a car, so I suggested that I would drive her to the bank.
She agreed and off we went. I was not sure if she was going to walk in the front door of the bank and walk out the back, so I decided I should follow her in. I stood off to the side, which was ok, but then she embarrassed me a bit when she was at the teller.
Here I am standing off to the side of the bank line and she is at the teller. She turns in my direction and asks very loudly, how much is the rent? I felt like some sort of evil, greedy landlord. It seems kind of funny now.
The good news is that she had enough in the bank to pay me.
The next month when I went to collect the money she had it all. I guess she got the message and that it would be easier to pay all the rent on time, so that she would not have to deal with me bugging her.
It is important to set the rent collection expectation. We usually run in to problems when we take over a property where the previous land lord or property manager was slack at rent collection.
We have a moto of providing good homes to good people. The reality is that if everyone is paying rent on time, we can focus on property maintenance and repairs. This benefits everyone living in the property.
Michael P Currie