Niche.com has ranked Anne Arundel County with an overall livability score of A+, naming it Maryland's best county for young professionals and one of the state's best places to live. The county boasts many high-quality public schools, outdoor recreation, and an excellent health system, so it's no wonder it attracts many renters, with one in four residents renting their homes.
As a new Arundel County landlord, you should find those stats and facts great news, as they indicate high demand for rental properties. However, always remember that, without efficient rent collection strategies, you could put your rental income and profits at risk.
So, join our experts at Caster Management LLC today as we share practical tenant payment tips and landlord rent strategies.
1. Provide Convenient Rent Payment Solutions
One of the most crucial strategies for efficient rent collection is adding technology-based platforms to your accepted payment methods. A good enough reason is that most U.S. consumers (55%) now do their banking activities via mobile apps, according to the American Bankers Association. Moreover, 22% use laptops or PCs for online banking, while only 8% visit a physical branch.
How Tech-Based Payments Facilitate Efficient Rent Collection
Online payment platforms give tenants a secure, convenient way to pay rent using digital and online payment solutions, such as:
- Credit and debit cards
- Mobile apps and wallets like PayPal, Venmo, Apple Pay, and Google Pay
- Electronic money transfers, such as ACH transactions and automated payments
- E-checks
A YouGov survey found that ease of use is the primary factor influencing many Americans to adopt mobile payments (72%). Many also favor these solutions for their speed (57%) and widespread acceptance (51%).
Given the popularity of mobile and online banking and financial apps, it's highly likely that many of your renters use them, too. So, allowing them to use these technologies enables them to pay rent conveniently and anywhere, increasing the likelihood of on-time payments.
Tips to Encourage Tenants to Adopt Tech-Based Payments
While many renters use digital and online banking and payment solutions, they don't always do so, and not all consumers have embraced such practices. For this reason, Anne Arundel County landlords should still accept traditional payments through checks or money orders.
However, it's also best to encourage residents to adopt mobile or online rent payment methods by highlighting their perks. For example, inform them that these online transactions are in real-time, so as long as they pay on or before the due date, their payment won't be late. Ensuring timely payments helps them avoid late fees and maintain their good standing.
Besides, it's for their convenience. When they pay online, they no longer have to travel to and queue at the bank to deposit their payment to you.
2. Invest in a Landlord-Tenant Portal
A landlord-tenant portal is a digital hub powered by rent management software. It allows landlords to:
- Track rental payments and see who has paid and who hasn't
- Send tenants rent payment reminders or property inspection/maintenance notices
- Access accounting and financial records
Tenants also benefit from the use of such digital hubs, as it enables them to:
- Make one-time online rental payments
- Set up a continuous auto-debit arrangement for their checking accounts
- Submit property upkeep/repair requests
Moreover, an online portal allows both parties to communicate securely, letting them send messages to each other. It also gives them convenient and easy access to critical documents like lease agreements and invoices.
So, a landlord-tenant portal simplifies rent collection for both parties while enhancing transparency and communication.
3. Implement Late Fees
Under Maryland Code, Real Property § 8-208(d)(3), landlords can charge a penalty for late rent payments capped at 5% of the due amount. For example, if you charge $1,500 monthly, the maximum late fee you can impose is $75.
Penalties can minimize the risk of late payments as most people don't want to incur additional charges they could otherwise avoid. By charging these fines, you can "incentivize' them to prioritize paying their rent on time.
4. Offer a Grace Period
A grace period is a set number of days after the due date during which a tenant can still pay rent without incurring late fees. While the length of the grace period varies from landlord to landlord, the most dependable and understanding landlords often have 5-day grace periods.
A grace period may seem counterintuitive to rent collection, but it can still help since it prevents tenants from further difficulties of paying rent with a penalty. It would be easier for them to pay just the base rent than pay it along with a hefty fine. They can avert further delays in paying if they can raise enough funds for the rent within the grace period.
A grace period also minimizes the odds of landlords resorting to the more drastic measure of evicting tenants in Anne Arundel County. Even if you evict tenants, there's no guarantee that you can recover unpaid rent. Worse, you'll lose your existing residents, and while your property sits empty, you won't have anyone to collect rent from.
5. Work With a Trustworthy Property Management Firm
Although being a landlord can be lucrative, it can be time-consuming and rife with legal and financial challenges. Fortunately, you don't have to do everything yourself, as you can partner with a reliable full-service property management firm. With a rental manager, you can simplify your life as a landlord, as you can outsource many tasks, including:
- Rental pricing analysis
- Property marketing and advertising
- Applicant screening and tenant placement
- Rent collection
- Lease enforcement
- Property maintenance
Simplify Rent Collection With Caster Management LLC
Effective rent collection strategies include offering tech-based payment solutions, investing in a portal, charging late fees, and implementing a grace period. However, they require time and know-how to put in place, which our full-service property management firm, Caster Management LLC, can provide.
Our team comprises professionals with extensive experience in real estate, property management, customer service, and accounting. Our owner, Ms. Zoleta Caster, has 20 years of management expertise and has been a licensed real estate agent for nearly two decades. Together with the rest of Caster Management LLC's skilled, educated members, we can help your rental business thrive in Anne Arundel County, MD.
Speak with us today so we can give you a free rental pricing analysis!
