Why should you set a rent due date?

rent

 

Are you planning to rent out your property? Is this your first property for rent? If yes, there are few things you must keep in mind. According to experts, a lot of landlords feel worried and concerned about rent. They ponder if tenants would pay on time. This is why you should establish a fixed date to collect rent.

Every tenant knows that rent must be paid. And, tenants should be aware of the rent they must pay. Along with these details, the tenant should be aware of what the due date. This date has to be mentioned in the lease or rental agreement. There are so many benefits in creating a fixed date to collect rent. Additionally, you must mention about the grace period. These details can save you from lots of conflicts and confusion!

Here are three important reasons to fix a due date

  • The landlord and the tenant should establish a firm routine. The tenant should understand why and when the rent must be paid every month. By establishing a routine, both the tenant and landlord can properly budget their finances.
  • With a fixed due date, tenants can schedule when and how their household bills are paid. Just like tenants, landlords have to settle many monthly payments. It is important for landlords to receive rent on time. For example, landlords use the rent to handle heating and water charges.
  • With a fixed due date, the process of filing evictions becomes easier. The landlord and the tenant can keep track of when the rents were paid and missed. If you have multiple properties, the fixed due date will be very useful. You must ensure that all the properties have the same due date. When you don’t receive rent for a specific tenant, you can trigger the eviction process easily.

When (or how often) should rent be collected?

It is important to decide when you would collect rent. This date depends on the landlord and the tenant. Don’t forget to discuss when the monthly rent would be due! Most landlords stick to a specific day – the first or second day of every month. There are many reasons to choose the first or second day of each month.

Why should you collect rent on the first or second day of each month?

    1. Most rental agreements begin from the first day of each month. Thus, it makes plenty of sense to collect rent on the very first day. It helps both the landlord and the tenant stay on track.
    2. Most companies pay their employees on the last or first day of each month. It would be wise to collect rent a day after the tenant’s paycheck is credited. This increases the chances of the tenant having money to pay rent. Moreover, this reduces the landlord’s risk factor.
    3. Just like many other household bills, the rent is a hefty bill to settle. Household bills like a credit card, mortgage, and utilities are generally scattered throughout the month. When rent is paid on the first or second day of each month, it helps the tenant handle rent without any hassles or tussles. If the rent due date is towards the end of a month, it increases the odds of a tenant running out of money.
    4. The last, first and second day of every month is easy to remember. As a month begins or ends, the rent becomes due! Doesn’t it sound simple?

Should you talk about grace period?

By default, tenants must pay rent within a due date! As mentioned previously, we assume the rent due date would be the last, first or second day of each month. Through rent should be paid within a due date, landlords can allow a grace period. It is up to the landlord to decide on the grace period.

By definition, the grace period gives tenants few more days to pay their monthly rent without facing any penalties or fees. For instance, the tenant can pay rent on the fifth or sixth day of the month.

The grace period helps when the rent due date falls on a holiday or weekend.

Even with a grace period, some tenants find it difficult to pay rent! If a tenant doesn’t pay rent within the grace period, he/she should pay penalty.

The Exceptions!

Whether you have a grace period or not, tenants must pay rent on time. If you have exceptions, tenants are likely to skip many months. So, ensure that the contract has all the right terms and conditions, especially regarding rent!

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