Receiving rent in full and on time is integral to keeping your buy-to-let up and running. This is why many landlords opt for managed rent collection services – but how does it work?
In this guide, we’ll discuss the differences between DIY rent collection and managed rent collection and how you could benefit from the help of an expert letting agent.
How do letting agents collect rent?
Most landlords rely on their rental income being consistent, and many will use it to subsidise their buy-to-let mortgages. Because of this, missed rental payments could leave many landlords in a sticky financial situation.
When letting agents are in charge of rent collection, they will take care of the following:
- Carrying out thorough referencing checks to ensure only trustworthy and responsible tenants are accepted.
- Checking on the day that rent is due that it has been received.
- Contacting tenants as soon as a payment is missed and following the necessary steps to resolve the issue.
Related: The landlords guide to amending and renewing tenancy agreements
The challenges of DIY rent collection
Having to chase up tenants for rent can be an uncomfortable and frustrating experience, and failing to handle the matter diplomatically could leave you in a tough situation. Regardless of whether they have paid rent on time, your tenants’ rights still stand and if you handle any part of rent collection incorrectly, you could land yourself in legal trouble.
Additionally, if you manage multiple properties at once, it can be difficult to keep track of who owes what. If you forget which day rent is due, you might not notice a missed payment right away.
Related: Exploring your rights as a landlord
How to prevent missed rental payments
The longer rent goes unpaid, the more challenging the situation becomes for both parties. It’s important to keep on top of rental payments and be ready to act quickly if one is missed. You should note down the date that rent is due and check your bank for the payment on the same date every month.
Some tenants simply forget to transfer the money on rent collection day, so you could request that they set up a direct debit for rent payments. If the rent is not received, you will need to contact the tenant by phone as soon as possible while also sending a follow-up email to confirm your conversation in writing.
Sometimes the issue is easily resolvable, other times, a lengthy legal process can take place. Getting to the bottom of the reason behind the missed payment as early as possible will buy you more time to proceed with the next steps.
Related: Top 10 mistakes that landlords make (and how to avoid them)
Why use a letting agent?
Letting agents can act on your behalf using the systems and processes they have in place to ensure rent is received on time every month. If your tenants are late making a payment, your agent will contact them promptly and work to resolve the issue.
Experienced agents know how to negotiate and communicate calmly in difficult situations. They will also know exactly how to navigate the challenge while ensuring that you and your property remain compliant with the law.
It’s important to note that most tenants who have been thoroughly screened beforehand will pay the rent in full and on time, but mistakes do happen. The key role of the letting agent is to be quick-to-action so that any issues are addressed and resolved before they escalate. All of this can save you a significant amount of time and money, and most importantly, you can let out your property with peace of mind.
