The end of the year is nigh, and you know what that means – the holidays are just around the corner!
While it’s a time to be jolly and make merry, for landlords, it can be a different kind of party. Usually, it’s a time when people are prone to overspending with little regard for tomorrow, with priorities such as rent being cast into the backburner.
Historically, the holidays – usually between the months of November and January – have been a time when rent payment rates take a dip as some tenants weigh up on whether to splash on holiday gifts, embark on a vacation or take care of bills.
Everyone is looking for money at the end of the year, you see, with organizations and bill collectors topping the list: mortgage, rent, credit card bills, student loans, medical bills, child support, charities you name it. And the holidays being what they are, some people are likely to throw caution to the wind and fail to live up to their end of the bargain.
This is why as a landlord or property manager, you need to be proactive to curb this behavior. It is your duty to make those calls to your tenants.
One way to avoid this kind of slippery behavior from tenants is to dispatch a notice in advance asking them to pay all rent arrears by year end, reminding them that this too is a bill like any other. In the event of delayed payments, it is your mortgage that is likely to be affected, and you too can expect that call from the bank.
It should not be lost on you that the holidays is a time in which employees could get laid off. They may face the sack afterward. Rent could be affected. Obviously, no one wishes these things upon someone, but that’s just the way things are. So, to cushion yourself from such surprises, it’s probably wise to send out an eviction notice if the rent is late by, say, a month – provided of course, you follow the eviction laws as stipulated in your respective state.
But the holidays are not all gloom and bad news. The end of the year is also a time when employee promotions and pay raises tend to be common, not forgetting Christmas bonuses.
There are lots of people out there capable of making timely payments and would be interested in your offering. That in mind, it’s never a bad idea to consider taking some more rental applications in case it gets to the unfortunate point of evicting a tenant during those last three months of the year.
This is particularly so if late payments are a common theme with some tenants. The advantage is that it helps avoid vacancy cases, definitely something no property owner wants.
You need to manage your property like a business all year round, the holidays included. A landlord’s chief concern is positive cash flow without which it is difficult to properly maintain property.
Have a set date on which tenants will make their rent payments – if it’s 5th of every month, let it be fifth, not 15th. Sometimes, people could be going through rough patches in their life, and they may fail to meet the deadline. In that case, it’s understandable to empathize with them. But this needs to be the exception, not a monthly norm.
By establishing a consistent pattern, over time, your tenants will know what is expected of them, and the ramifications in case they get late. That way, they are likely to prioritize rent along the other pressing bills they need to take care of during the holidays, not something they can hold off until later when the money is happy.