Setting a Rent Due Date for Tenants
Benefits of Collecting Rent on the First of the Month
Tenants know that they have to pay rent each month, but you have to let them know when it is due. Rent should be due on the same date each month and this date should be clearly listed in the lease agreement. Learn the benefits of setting a due date and why allowing a grace period can also be helpful.
3 Reasons Setting a Rent Due Date Is Important
- Establish Routine: If tenants understand that rent is due at a certain time each month, they will learn to budget their money so they can pay their bills on time.
- Helps You Schedule/Pay Your Own Bills: Receiving rent at a consistent time each month will help you budget your own bill payments. For example, you may use tenants' rent payment to pay for property expenses, such as water bills or heating costs.
- Easier to File for Evictions: When the rent is due on the same day each month, it is easier to keep track of late or non-payment. If you have four tenants and have only received three rent payments by the fourteenth of the month, it is easy to see that you need to start eviction procedures against one tenant.
When Will the Rent Be Collected?
You must decide when the rent is due. While it is completely up to you, the landlord, there is one day that is more popular than others to collect rent. Many landlords decide to collect the rent on the first day of each month.
Why Is the First of the Month So Popular?:
- Leases Usually Begin on the First- Many leases begin on the first of the month. Therefore, it makes sense that all rent payments would also be due on the first of each month.
- People Get Paid- Many people get paid at the end of the week or at the end of the month. Therefore, people will usually receive their paycheck right before the rent is due, which increases the odds that they will have the money available to make their monthly rent payment.
- Get Rent Before Other Bills Are Due- Due dates for bills such as utilities, credit cards and mortgages are scattered throughout the month. By collecting rent on the first of the month, before these other bills are due, you are increasing your odds that the tenant will have the money available to pay your rent instead of using this money to pay another bill that was due earlier.
- Easy to Remember- Another reason collecting rent on the first of the month is a good idea is because it is easy to remember for both you and your tenant. When a new month begins, the rent is due.
Will You Allow a Grace Period?
You have decided on the date that your tenants must pay rent. We will assume that you chose the first of the month.
Even though the rent may be due on the first of the month, some landlords will allow a certain grace period. This grace period will allow tenants to pay their rent a couple of days after the first of the month without facing any penalty. For example, a landlord may allow tenants to pay rent up until the fifth of the month without any penalty.
Giving some leeway makes things easier when the first of the month falls on a weekend or on a holiday. This way you won’t have to spend Labor Day tracking down rent payments.
Even with the extra grace period, you will still hear the sob stories of, 'the check was in the mail.' However, since you are already giving tenants extra days to pay, you should not be as lenient.
Whether all rent must be in by the first or you allow some extra grace period, you must stick firm to your rules. If you allow an exception once, the tenant will think they can get away with it again.
In addition, if there was no penalty for breaking one rule on the contract, the tenant may think they can break other rules in the lease agreement without facing any penalty.
You should always include when the rent is due on your lease agreement so that there is no question. For example: The rent is due on the first day of each month. If the monthly rent payment has not been received by the fifth day of that same month, it is considered late.