Have you noticed how your tenants in Denver, CO, never stay for over a year? Or perhaps they do, but you still don't make enough rental income. You may even have renters who always make late rent payments.
All those are problems indicating your rent collection policies are failing. And the longer these go on, the more significant their impact on your bottom line.
To that end, we created this guide discussing the top rent collection mistakes to avoid. Read on to discover what they are and what to do instead.
1. Overcharging or Undercharging Rent
If you're collecting rent higher than those for similar properties, your current tenants will unlikely want to renew their lease. On the other hand, charging below-average rates can significantly lower your bottom line.
Therefore, always aim to charge fair rental rates. You can do this through a comprehensive rental analysis. You can get this free if you partner with a reputable full-service property management company.
2. Inconsistent Policies
Your lease agreement should clearly state how much you charge for rent, its due dates, and payment options. It must also indicate grace periods and late fees.
Most importantly, you must be consistent in enforcing those policies. Because if you don't, your tenants may think it's okay not to pay on time.
3. Being Lenient With Late Fees
Imposing late fees can help prevent tenants from not paying rent on time. You already provide them with a grace period, so if they go beyond this, they should be ready to pay extra.
If it's the first time a tenant can't pay rent on time, it's okay to consider not charging them a late fee. However, remind them you won't be as lenient the next time they fail to pay on time.
4. Failure to Give Advanced Notice
In 2023, Denver landlords filed eviction actions against almost 13,000 households. That's the highest eviction rate the city has seen in 15 years!
The most common reasons for those legal actions are non-payment of rent and breach of lease. However, just because a tenant doesn't pay on time or breaks the contract doesn't mean you can evict them immediately.
In Denver, CO, you must first give such tenants a Ten-Day Demand for Compliance or Possession. This notice must state the rent owed or how they violated the lease.
Upon receipt, the tenants have ten days to pay the owed rent, correct the violation, or move out of the property. If they don't, that's the only time you can begin the eviction or "Forcible Entry and Detainer" (FED) process.
FED is a type of court order and, thus, a legal requirement for removing tenants from a rental property. Moreover, only a sheriff can enforce it.
Simplify Rent Collection With Professional Property Management
From overcharging to undercharging rent and inconsistent policies, all these are rent collection mistakes to avoid at all costs. After all, they can affect your bottom line and lead to costly evictions.
At PMI Cedarboldt, we aim to help landlords avoid such mistakes and make their properties more profitable. With our property management services, we can assist you in making the most of your Denver real estate properties.
So, call us today for a consultation! We look forward to discussing how we can make managing your property manageable!
