What are the Best Ways to Make Sure Tenants Pay on Time?

The rent not arriving on time is many Landlord's biggest fear and rightly so; last year around 60% of UK landlords suffered arrears to some level.

Because Upad Landlords can collect the rent via Direct Debit, and choose their own tenants starting a professional relationship from day one, the number who suffered arrears is 45% less than the average.

Landlord Tips What Are The Best Ways to Make Sure Tenants Pay on Time?

Here are 10 of those Landlords' approaches to making sure the rent does come on time.

1. Get agreement upfront and be fair and reasonable

(Michael Soter)

You should agree at the beginning of the tenancy with the tenants when the monthly payment is due. I like to have all payments coming in on or around the first of each calendar month and will take a pro-rata part payment for the first month if they are moving in part way through the month. However, depending on when the tenant is paid, this may not be the best time for them - so you may need to negotiate a better date.

Again, at the beginning of the tenancy, when you are discussing payment methods explain that they should contact you if the payment is going to be late - I generally say I need to tick things off and it helps if I don't need to chase them.

Try and get them to set up a Direct Debit rather than pay via BACS transfer to avoid forgetting (e.g. if they're on holiday). Keep a diary/spreadsheet of exactly what day in the month payment comes in and you will see a trend. If one tenant consistently pays on (say) the 7th ... then I don't make an issue of it.

Always be polite and courteous if you want them to be courteous to you. The first reminder can be a simple and friendly text message asking for an update as in most cases there's a simple explanation.

Upad can take care of all the tenancy paperwork: the contract, deposit protection, first month rent collection and the set up of a standing order. Find out more about our Tenant Sign-up Service.

2. Don't let an agent's actions cause you problems further down the line

(Chris Ingram)

The key here is be professional; they need to know and understand this is a business transaction each month. By handling the viewings, signing the tenancy agreement, deposit protection and managing the let yourself you can gain this professional relationship much quicker. Thats why Upad is so good as it gives you more control over the process, you only need an agent to rub a tenant up the wrong way and this could leave you out of pocket down the line.

3. Have a 'three strikes' rule

(Debra Chappelow)

Online banking means we can keep track of rents as they are due. If any tenant rents don't follow their usual pattern, we automatically text the tenant to advise "rent hasn't arrived, please advise". The rent usually arrives very soon afterwards. We encourage tenants to notify us immediately if they are experiencing difficulties. Tenants with a history of late paying are warned about their tenancy being jeopardised and we have a 'three strikes and you're out' rule.

4. Get some technology in

(Chris Baron)

I use one of the well known software packages (Landlords Property Manager) for managing my tenancies and being a bit of a techie I have written my own extension which automatically send the lead tenant a rent reminder email 3 days before it's due and automatically generates and emails a rent statements 10 days after payment was due which also reminds them of their next payment due date.

Since implementing this I now rarely get a tenant paying late. Thanks to my technical knowledge, for me this happens automatically in the background without me needing to do something which is a bonus as I have quite a few tenancies but for people with just a few tenancies this could be done quite easily with a manual system.

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5. Get personal with new tenants


When a tenant first moves into a property we always collect the rent in person for the first few months, this helps us to get to know the tenant and they can let us know if they have any problems with the house. After a few months we get them to set up a direct payment through the Bank. If we have problem payers we keep a seperate file with there payment details in then we can keep track of them more easily.

6. Build in a Christmas holiday

(Daphne Morgan)

Calculate the complete tenancy period, say 12 months, by 48 weeks instead of 52. So, say you have an LHA tenant paying £80 per week, ask them to pay £86.67 per week for 48 weeks and tell them this means they can have 4 weeks of ''no rent'' for Christmas shopping.

7. Charge for rent reminders and provide good tenants with a good service

(Joanna Woods)

Given that the best way to ensure rent is paid on time is careful vetting of tenants, preferably with guarantors, there are still ways to ensure things run smoothly once they're in residence. If you have used a tenancy agreement which provides for rent reminders to be charged to the tenant,that helps. Remind them verbally, or in a short friendly letter, of this part of the agreement at the start of the tenancy - so they know you will use it if necessary.

I always send a text reminder (for which I don't charge) a few days before rent is due. A friendly reminder about the advantages of standing order,e.g. if the tenant is abroad on rent day, may be included. A second text may be sent as soon as the rent day is missed, advising that I'm sorry but as per the agreement, formal, charged, reminder letters will be sent to tenant and their guarantor unless there is payment/ satisfactory response to text within say 12/24 hours.

That's been the most I have needed so far. Rent hasn't been late since. This underlines the advantage of having fully vetted guarantors for your tenants and is another good reason for having students as tenants. I have been lucky enough to have two tenants on postgraduate stipends who have chosen to pay 3 months rent in advance as soon as they received their stipends. This is to help them budget. It may be worth suggesting this as an option to tenants who receive grants or stipends as a lump sum in advance.

Finally, I aim to give good service to my tenants, asking if there are any problems and dealing with them promptly. First class tenants deserve first class service and mutual respect is probably the best guarantor of rent paid promptly.

8. Reward those who pay on time


I give all my tenants a Christmas bonus incentive in December. Providing they don't miss a monthly payment date all throughout the year, I give them £20 back in December. So far I have not had a tenant miss any payment dates.

9. Agree a payment plan

(Radhika Narasimhan)

With difficult tenants, agree a payment plan and send a monthly letter with a schedule of dates and amounts. This works well for LHA tenants who have to pay top ups but are always getting behind with arrears. It also helps with tenants who get into a difficult situation because of loss of job, reduction in salary or break up with a partner.

This payment plan is normally weekly or bi-weekly. The letter acts as a reminder for them to tick off when they have paid and also they tend to adhere to it; because you have involved them in deciding a payment plan that works for them and so they tend to stay committed.

10. Buy for your target market

(Jon Lindsey)

Unlike some high street lettings agents, being an amicable and personable landlord creates rapport with your tenants. People feel guilty doing bad things to good people, so showing them you're human and not deserving of bad treatment makes them less likely to pay rent late, because they can't justify it, unlike saying 'it's a business that doesn't need the money as much as I do'.

Tailor your approach for your kind of tenant

It was clear from the responses we got that the way you handle this subject should largely depend on the kind of tenants you have. You should consider whether a hardline approach or a consultative approach is going to work best with your kind of tenant. Regardless making sure everyone knows where they stand and keeping lines of communication open remain the most important elements to both avoiding the problem in the first place and stopping it turning into a nightmare for all.

Receive rental payments on time with Rent Manager
Get started with Direct Debit rent collection for just £149 per year!
Click here to find out more

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