Landlords – here’s how to manage and prevent rent arrears
Falling into rent arrears can be a distressing matter for tenants, but it’s also problematic for landlords, as tenants failing to pay on time can lead to financial issues and the inability to keep up with all-important buy-to-let mortgage payments.
As a landlord, it’s easy to assume that rent will keep rolling in once the contract is signed. However, rent arrears can occur for a number of reasons, and it can be difficult to predict when and how the shortfall will come.
While it’s the responsibility of the tenant to make sure rent is paid in full and on time, landlords can put a number of measures in place to reduce the risk of rent arrears occurring regularly.
Having a wealth of experience in processing rental payments and issuing legal notice and claims, here at Island Lettings we have put together some tips to help landlords handle and prevent loss of rent.
Good communication and building a rapport
Developing a good relationship with your tenants is one simple yet effective way to avoid rent arrears.
Setting professional boundaries while being cordial and friendly, as well as carrying out any necessary repairs or maintenance in a reasonable amount of time, will go a long way to gain a tenant’s trust. By doing so, they will be more inclined to open up about any financial difficulties they are expecting or experiencing.
With this approach, you will be able to assess the situation and minimise any missed payments and voids.
Keep on top of payments
However you choose to manage rent payments, you want to make sure that you check records closely. Ideally, tenants will set up monthly bank transfers to either you or letting agent.
Landlords are extremely busy, so you may not have the time to set up a failsafe checking system. However, there are specific tools to support landlords in this area.
Here at Island Lettings, we use the latest technology to sign documents electronically and communicate via email, text or phone to ensure the swift collection of rental payments. We also vet tenants, in addition to the comprehensive management of the rent accounts.
Take a pragmatic approach
If the rent has not been paid, you want to act promptly by getting in touch with the tenant by phone, email or in person. It may be a problem out of the tenant’s control that is still easily resolvable, such as genuine banking or administrative issues.
Sometimes, though, the problem may be more serious. In situations like these, it’s even more important that you speak to your tenant as quickly as possible.
Depending on the issue, consider putting together a repayment plan to bring the arrears back under control. If you’ve maintained a good relationship with your tenant, it may be easier for both parties to agree to this temporary adjustment until things are in order again.
For longer-term financial difficulty, the tenant may need to resort to applying for housing benefit to help pay their rent. Whatever the case, you want to remain professional at all times, keeping a clear record of all communications.
Here at Island Lettings, we manage over 500 properties across the Island and have very few tenancies in rent arrears.
In the unlikely event of legal action becoming necessary, our experience in issuing legal notices and claims, along with our in-house expertise, could potentially save landlords hundreds of pounds in legal costs.
For more information about what we can do to help in the events of rent arrears, please get in touch with us on 01981 521112.
Additionally, we provide free and instant online valuations to give you an idea of how much your property is worth and what rents you could be charging in the current market.