Mastering Rent Collection in Ontario
Navigating the realm of rental properties in Ontario presents unique challenges for landlords, especially when it comes to ensuring rent is collected, if at all! It’s perhaps one of the biggest fears shared among landlords. This fear can also deter those who aspire to become landlords, leading them to shy away from investing in rental properties altogether. Effective rent collection is a skill, not luck. But fear not, mastering this skill is achievable! Here’s how:
Tenant Selection
Placing a qualified tenant is undeniably the first step. As the saying goes, “if you fail to plan, you plan to fail.” This principle holds true for tenant selection as well.
Landlords should absolutely avoid shortcuts during this crucial phase. They must conduct thorough background and credit checks, as well as verify employment information. Gut feelings should never dictate tenant selection; instead, landlords must have well-defined tenant screening procedures in place.
Clear Communication
From the start, landlords should establish clear expectations regarding rent payments dates, methods, and any consequences for non-payment. All this information must be clearly outlined in the lease agreement. By providing transparent information upfront, misunderstandings and disputes can be minimized.
Offer Flexible Payment Options
Providing flexibility in rent payment options can help accommodate tenants’ preferences. While some tenants may prefer traditional methods like checks or cash, others may favor digital platforms or automatic bank transfers.
In today’s digital age, an increasing number of tenants are embracing digital platforms. Landlords can make the payment process more convenient by adopting these platforms, resulting in quicker and more reliable payments.
Incentivize Tenants
Landlords may consider giving incentives to tenants who consistently pay their rent on time, such as gift cards or even partial or no rent increase at year-end if they are already paying market rent. Maintaining a reliable tenant who pays rent punctually is preferable to searching for a new one.
Rent Reporting
Landlords can take advantage of technology tools like rent reporting, which can increase the likelihood of on-time rent payments and help tenants build their credit history at the same time. Landlords should inform tenants during the selection phase that tenant credit reporting is mandatory, with tenant consent required. Landlords can also encourage existing tenants to participate in the rent reporting program with consent.
Service mindset
Sadly, service often takes a back seat in the rental business. At times, a landlord may think, “It’s my property so I can get to the issue whenever I want” or “Tenants have to wait until I have the time to get to it.” Needless to say, this is not the right approach to take. Landlords should act swiftly to resolve any issues in rental units. They have a duty to maintain the rental unit and provide quality service to tenants. Why? Because, tenants are paying rent and landlords shouldn’t give them a reason not to! It is important to note that according to the Residential Tenancies Act, the tenant must pay their rent, even if they have problems with the maintenance and repair of their unit or property. Nevertheless, prompt resolution of maintenance issues and well-maintained properties foster tenant satisfaction and prompt rent payment.
What if a tenant still doesn’t pay rent?
Even when landlords do everything right, there may be instances where a tenant fails to pay rent. In such situations, landlords should consider a few options before taking confrontational measures.
Understand Tenant Circumstances
Each tenant has unique circumstances that may affect their ability to pay rent on time. This can present a challenge for landlords, as they have various expenses such as mortgage, property tax, insurance, utilities and maintenance bills to cover. But at the same time, landlords have a moral duty to understand and empathize with their tenants’ situations. When tenants encounter financial difficulties, landlords can approach the situation with compassion and explore potential solutions, such as temporary payment plans or rent adjustments.
Provide Supportive Resources
Landlords can support tenants in meeting their rent obligations by providing resources and assistance needed. This may include referrals to financial counseling services, information on government assistance programs, or guidance on budgeting and financial management.
Some may wonder, “Why should I go the extra mile to assist tenants who are unable to pay rent?” The answer is simple. By empowering tenants to improve their financial literacy and stability, landlords can help prevent future payment issues.
Seek Professional Assistance When Needed
If all else fails, landlords may seek professional assistance and, if necessary, initiate the eviction process. Property management companies and legal experts can provide valuable guidance in navigating rent collection issues while ensuring compliance with relevant laws.
In summary, mastering rent collection requires established tenant screening practices, clear communication, flexibility, a service mindset, empathy, and professionalism. Sure, it may feel overwhelming, but approaching rent collection as a collaborative process rather than a confrontational one, landlords can maintain positive relationships with tenants while ensuring the financial success of their rental properties.
