I have heart palpitations on the first of the month.
I'm so afraid I'm going to open the mailbox and moths will fly out. No rent checks. Just endless bills. It's an anxiety-fueled nightmare that has no bearing on reality, yet month after month, there it is. I have 23 rented units. My biggest fear is there will be a month where I have to file 23 evictions for non-payment of rent.
Here's what actually happens: I go to the mailbox on the first and there's a few checks in there. 5 or 6. We use one of those UPS Mailbox centers, and I know sometimes it takes them awhile to get the mail and sort it all, so I don't freak out until the 5th. Well, I actually do freak out. But I say the Serenity Prayer until it passes.
By the 5th, just about everyone has paid. I don't charge a late fee until after the 5th – that gives the tenants depending on social security or veteran's benefits a chance to get their checks in. Some of my tenants call or text around the 4th or 5th asking if I want to pick up their rent. If it's convenient for me or my husband to swing by in the next 24 hours I usually agree to, although I really wish they'd just set an alarm or something to mail the rent out so it gets to me before it's late. We're still small enough, so I'll pick it up. It's better to have it than not.
Every month, though, there are stragglers.
I had to file two evictions in May. I filed them on May 30th, and that's not good. If it's clear I'm not going to get paid, I can't let it slide for an entire month! I have a million excuses – I was extremely busy, working on other important projects for our business. My daughter's 7th birthday was on the 8th, and her big party with all the family coming in from out of state was Memorial Day weekend. I called the tenants, they said they'd mail the payments. Maybe if I just give them a few more days?
A rookie mistake made by a landlord with nine years’ experience!
Clearly, A System for Collecting Rents is Needed
Having a system in place – a policy & procedure to follow – helps take my emotions out of it. I hate having to chase down delinquent rents! I'm a lousy bill collector. Left to my own devices, I have two speeds – Super Nice and Super Bitch.
Super Nice is way too lenient. She always waives the late fee. She'll pick up the rent next week when you get paid again. When you miss the appointment, she'll text you again to set up another one. She just wants you to be happy because she just wants to be liked.
Super Bitch is the Heartless Slumlord from Hell. She'll throw you and your children out on the street in the dead of winter, and your little dog, too! Payment arrangements? To Hell with you, Deadbeat Scum! You'll pay the whole amount NOW plus the late fee, plus the court filing fee or OUT YOU GO and YOU'LL NEVER RENT IN THIS TOWN AGAIN! Then I blow out the candle which is their only source of light and steal the last glowing coal from their stove.
I'm usually only Super Bitch when I'm playing out scenarios in my head. Very rarely does she see the light of day. When she does come out, the tenant probably deserved it.
Collections and evictions are emotionally charged issues for me – see last week’s post: http://thisgingerjustsnapped.weebly.com/blog/open-letter-to-an-evicted-tenant
I hate it when people don't live up to their agreements. At the same time, I hate chasing people for money, especially people who are on the ropes financially. I know how that feels! And I especially hate forcibly removing people from my units. Why don't they just go voluntarily? I know a lot of people stay until the bitter end of an eviction because they think they're entitled to something for nothing. But some of them truly have nowhere else to go. That makes me sad. Someday, I'm going to do something about that with a non-profit foundation I'm going to start. But I need to have a successful business before I can start any foundations, so Policies & Procedures it is!
One Approach to Collecting Rents
I've heard “Fifth & File” is the only policy that works. If rent is due and unpaid by the 5th of the month, file eviction. No warnings, no excuses, no drama. If they pay they can stay. I know some landlords who file eviction on the second of the month!
I vowed to do Fifth & File. I think I even wrote a blog post about it once. But I failed. I can't bring myself to be that systematic. It would mean evicting great tenants like the one renting the house I used to live in. She's planted flowers, painted the porch, and renovated the attic into living space. The place looks better than it did when it was my personal residence! She rarely gets me her rent before the 8th of the month, and I usually have to pick it up. But... she always pays. Never causes trouble. The neighbors love her. She's an awesome tenant. Been there two years now, and I hope she's there for the next twenty. Long-term, stable tenants are great for cash flow! It's the turnover expenses that kill you.
So I devised a system that's a bit gentler than Fifth & File. I check the box on the 2nd of the month (giving the UPS store time to get the mail sorted) and make note of who paid. Those are my Gold Star Tenants. The ones who actually take seriously the line in the lease that says “Rent is due on the 1st.” Theirs are the leases I want to renew.
I check the box again on the 6th of the month. I might check it before then, but only if I'm driving past it anyway – no need to obsess. The rents in the box of the 6th represent the tenants who paid “On Time” - during my late fee grace period. Everyone else is a Straggler.
The 6th of the month is Rent Collections Day. Most of my tenants accept text messages, so the first thing I do is contact each Straggler via text. “Hey (tenant name) it's Kelly. I don't have your rent. Did you mail it yet or do you need me to pick up?” If I don't get a return text within a reasonable amount of time, I will call and leave a voicemail as well.
Today, I had four Stragglers. Three responded to my text. One I had to call, but she did call me back. One check is in the mail. Another I'll pick up tomorrow, the third on Thursday, and the forth will pay on the 15th since they ran into some financial issues this month. Very good. My rent collections work is done for today.
If I did not receive a return text or call within 24 hours, my next step would be to knock on the door, carrying a note to post if no one answers. I wrote out a template of the note today:
Dear ________,
Just a friendly reminder your rent of $________ was due on the 1st and we have not received it. A late fee of $50 is now due, making the total amount owed $__________.
It is important that you let me know when I can expect payment in-full, or if you need to make payment arrangements.
You can call or text (570) 798-7051. If you call and get voicemail, please select option 2. It is important that you contact me within the next 24 hours.
Thank you,
Kelly Rafuse,
Property Manager
No drama. No mention of evictions, or fire and brimstone. And I'm not waiving the late fee if you make me drive over to post your door!
Once that's done, it's completely out of my hands. In 24 hours, I'll know if I have to file an eviction. And I will! With a clear conscience. I was nice, but not too nice. And I wasn't Super Bitch Slumlord from Hell, either. Business is business.
Following Up on Rent Collections
I didn't have to post any doors this month, because my four Stragglers all answered my texts and phone calls. But that doesn't mean my collections process is over for the month. I still have to follow up.
Straggler #1 says his rent is in the mail. I'll give that check a maximum of four days to show up. I'm going away this weekend, so it'll have until Monday morning to make an appearance in my UPS box. If it isn't there, he's going to have some 'splainin' to do. I'll offer him the option of canceling the check and coming up with cash for me to pick up within 48 hours. Eviction is filed on Wednesday if I don't have my money.
Straggler #2 says I can pick up her rent tomorrow afternoon. I'll bring my friendly reminder note just in case she and the rent aren't home. The same goes for Straggler #3 who says I can pick hers up Thursday morning.
Straggler #4 told me they'll have the rent on the 15th. That's a Thursday. If they blow me off I'll call and text both of them, and post a note if necessary. Their eviction gets filed the morning of Monday the 19th.
All in all, I think my plan is fair. Some may think it too lenient, but no one can ever say I didn't give these tenants every chance in the world. My latest eviction will be filed on the 19th, which is a grand improvement over the 30th.
If I can avoid eviction altogether, everybody wins.
I'm so afraid I'm going to open the mailbox and moths will fly out. No rent checks. Just endless bills. It's an anxiety-fueled nightmare that has no bearing on reality, yet month after month, there it is. I have 23 rented units. My biggest fear is there will be a month where I have to file 23 evictions for non-payment of rent.
Here's what actually happens: I go to the mailbox on the first and there's a few checks in there. 5 or 6. We use one of those UPS Mailbox centers, and I know sometimes it takes them awhile to get the mail and sort it all, so I don't freak out until the 5th. Well, I actually do freak out. But I say the Serenity Prayer until it passes.
By the 5th, just about everyone has paid. I don't charge a late fee until after the 5th – that gives the tenants depending on social security or veteran's benefits a chance to get their checks in. Some of my tenants call or text around the 4th or 5th asking if I want to pick up their rent. If it's convenient for me or my husband to swing by in the next 24 hours I usually agree to, although I really wish they'd just set an alarm or something to mail the rent out so it gets to me before it's late. We're still small enough, so I'll pick it up. It's better to have it than not.
Every month, though, there are stragglers.
I had to file two evictions in May. I filed them on May 30th, and that's not good. If it's clear I'm not going to get paid, I can't let it slide for an entire month! I have a million excuses – I was extremely busy, working on other important projects for our business. My daughter's 7th birthday was on the 8th, and her big party with all the family coming in from out of state was Memorial Day weekend. I called the tenants, they said they'd mail the payments. Maybe if I just give them a few more days?
A rookie mistake made by a landlord with nine years’ experience!
Clearly, A System for Collecting Rents is Needed
Having a system in place – a policy & procedure to follow – helps take my emotions out of it. I hate having to chase down delinquent rents! I'm a lousy bill collector. Left to my own devices, I have two speeds – Super Nice and Super Bitch.
Super Nice is way too lenient. She always waives the late fee. She'll pick up the rent next week when you get paid again. When you miss the appointment, she'll text you again to set up another one. She just wants you to be happy because she just wants to be liked.
Super Bitch is the Heartless Slumlord from Hell. She'll throw you and your children out on the street in the dead of winter, and your little dog, too! Payment arrangements? To Hell with you, Deadbeat Scum! You'll pay the whole amount NOW plus the late fee, plus the court filing fee or OUT YOU GO and YOU'LL NEVER RENT IN THIS TOWN AGAIN! Then I blow out the candle which is their only source of light and steal the last glowing coal from their stove.
I'm usually only Super Bitch when I'm playing out scenarios in my head. Very rarely does she see the light of day. When she does come out, the tenant probably deserved it.
Collections and evictions are emotionally charged issues for me – see last week’s post: http://thisgingerjustsnapped.weebly.com/blog/open-letter-to-an-evicted-tenant
I hate it when people don't live up to their agreements. At the same time, I hate chasing people for money, especially people who are on the ropes financially. I know how that feels! And I especially hate forcibly removing people from my units. Why don't they just go voluntarily? I know a lot of people stay until the bitter end of an eviction because they think they're entitled to something for nothing. But some of them truly have nowhere else to go. That makes me sad. Someday, I'm going to do something about that with a non-profit foundation I'm going to start. But I need to have a successful business before I can start any foundations, so Policies & Procedures it is!
One Approach to Collecting Rents
I've heard “Fifth & File” is the only policy that works. If rent is due and unpaid by the 5th of the month, file eviction. No warnings, no excuses, no drama. If they pay they can stay. I know some landlords who file eviction on the second of the month!
I vowed to do Fifth & File. I think I even wrote a blog post about it once. But I failed. I can't bring myself to be that systematic. It would mean evicting great tenants like the one renting the house I used to live in. She's planted flowers, painted the porch, and renovated the attic into living space. The place looks better than it did when it was my personal residence! She rarely gets me her rent before the 8th of the month, and I usually have to pick it up. But... she always pays. Never causes trouble. The neighbors love her. She's an awesome tenant. Been there two years now, and I hope she's there for the next twenty. Long-term, stable tenants are great for cash flow! It's the turnover expenses that kill you.
So I devised a system that's a bit gentler than Fifth & File. I check the box on the 2nd of the month (giving the UPS store time to get the mail sorted) and make note of who paid. Those are my Gold Star Tenants. The ones who actually take seriously the line in the lease that says “Rent is due on the 1st.” Theirs are the leases I want to renew.
I check the box again on the 6th of the month. I might check it before then, but only if I'm driving past it anyway – no need to obsess. The rents in the box of the 6th represent the tenants who paid “On Time” - during my late fee grace period. Everyone else is a Straggler.
The 6th of the month is Rent Collections Day. Most of my tenants accept text messages, so the first thing I do is contact each Straggler via text. “Hey (tenant name) it's Kelly. I don't have your rent. Did you mail it yet or do you need me to pick up?” If I don't get a return text within a reasonable amount of time, I will call and leave a voicemail as well.
Today, I had four Stragglers. Three responded to my text. One I had to call, but she did call me back. One check is in the mail. Another I'll pick up tomorrow, the third on Thursday, and the forth will pay on the 15th since they ran into some financial issues this month. Very good. My rent collections work is done for today.
If I did not receive a return text or call within 24 hours, my next step would be to knock on the door, carrying a note to post if no one answers. I wrote out a template of the note today:
Dear ________,
Just a friendly reminder your rent of $________ was due on the 1st and we have not received it. A late fee of $50 is now due, making the total amount owed $__________.
It is important that you let me know when I can expect payment in-full, or if you need to make payment arrangements.
You can call or text (570) 798-7051. If you call and get voicemail, please select option 2. It is important that you contact me within the next 24 hours.
Thank you,
Kelly Rafuse,
Property Manager
No drama. No mention of evictions, or fire and brimstone. And I'm not waiving the late fee if you make me drive over to post your door!
Once that's done, it's completely out of my hands. In 24 hours, I'll know if I have to file an eviction. And I will! With a clear conscience. I was nice, but not too nice. And I wasn't Super Bitch Slumlord from Hell, either. Business is business.
Following Up on Rent Collections
I didn't have to post any doors this month, because my four Stragglers all answered my texts and phone calls. But that doesn't mean my collections process is over for the month. I still have to follow up.
Straggler #1 says his rent is in the mail. I'll give that check a maximum of four days to show up. I'm going away this weekend, so it'll have until Monday morning to make an appearance in my UPS box. If it isn't there, he's going to have some 'splainin' to do. I'll offer him the option of canceling the check and coming up with cash for me to pick up within 48 hours. Eviction is filed on Wednesday if I don't have my money.
Straggler #2 says I can pick up her rent tomorrow afternoon. I'll bring my friendly reminder note just in case she and the rent aren't home. The same goes for Straggler #3 who says I can pick hers up Thursday morning.
Straggler #4 told me they'll have the rent on the 15th. That's a Thursday. If they blow me off I'll call and text both of them, and post a note if necessary. Their eviction gets filed the morning of Monday the 19th.
All in all, I think my plan is fair. Some may think it too lenient, but no one can ever say I didn't give these tenants every chance in the world. My latest eviction will be filed on the 19th, which is a grand improvement over the 30th.
If I can avoid eviction altogether, everybody wins.