Does your letting agency offer a rent collection service? If not, it could do. Some agencies have been offering rent collection as part of their packages for over 50 years, yet many still leave rental payments between the tenant and the landlord.
Money conversations can be difficult, not to mention time consuming. Ensuring conversations about rent arrears are conducted formally and are recorded can be key to securing an eviction if a tenancy agreement completely fails. With a rise in tenancy lengths, traditional letting agencies are starting to rethink their offering, especially in light of the expected ban on upfront fees to tenants.
WHAT’S WRONG WITH STANDING ORDERS AND BANK TRANSFERS?
Some tenants don’t have a problem with paying their rent on time and many will create a standing order from the first day of their tenancy.
But if a tenant does decide to cancel their standing order, you’ll only know once a payment hasn’t been made – creating problems and time-consuming admin for your agency.
Many tenants prefer to pay on a day that suits them and in line with their own way of budgeting – which is why a lot of standing orders get cancelled in preference of paying the rent over the phone or via a bank transfer. The main issue with bank transfers is similar to a standing order – you’ll only know if a tenant doesn’t plan to pay the rent once the payment hasn’t been made.
Again, not all tenants are bad with money, some just simply forget to pay the rent.
CREATING AN ADDED-VALUE SERVICE FOR YOUR LANDLORDS
As the market changes, we understand that letting agents will want to protect revenue and retain landlords. We’ve known for some time that low-level arrears are an issue in the UK rental market, and as the 2017 HomeLet Landlord Survey* showed, non-payment of rent was an issue for 67 per cent of landlords who have experienced problems with a tenancy.
Our survey shows that non-payment of rent is an issue for 67 per cent landlords who have experienced problems with a tenancy.”
Most landlords hope to make money from their rental property so collecting rent is one of their main concerns. Collecting rent regularly and on schedule will be key for some as they seek to maintain regular repayments on their own buy-to-let mortgages. Rent collection services include arrears chasing and offer agents a more reliable means of collecting rent.
A landlord that is not using an agent to collect rent must remember to check with their bank on the rent due date and chase the tenant if the rent isn’t paid on time. Like a fully-managed service, rent collection offers another point of contact between the letting agent and the landlord, giving you, the agent, a full understanding of the status of the tenancy.
RENT COLLECTION FROM PAID & CO BY HOMELET
With PAID & CO by HomeLet, the admin and arrears chasing is taken care of. You can set any collection date that is suitable for both the tenant and the landlord, and update it later if circumstances change.
Our early warning system will also alert you to any cancellation of a regular payment from a tenant so you are able to intervene and resolve the situation before the rent is even late. This not only helps you to maintain a good relationship between the tenant and the landlord but also safeguards your agency’s reputation.
We’ll send tenants automatic text message reminders three days before the rent’s due and automatically attempt to collect the rent again if the tenant can’t pay on rent day… and then another try if that fails. Once a payment has been collected we’ll also send the tenant a ‘thank you’ message and report the status of rent payments to credit reference agencies.
*The HomeLet 2017 landlord survey is based on 3,726 responses from UK landlords.
Tim Rooney is Managing Director of PAID & CO by HomeLet.
Find out more about smart rent collection at www.paidandco.com