In a previous blog we discussed how a property management company goes about setting the rental rate. Whether you’re a condo property management company, retail management company, or an industrial property management company, setting rent and collecting rent are the sustenance of your business. This blog is going to switch the focus from the previous blog and instead of discussing setting the rental rate, we will answer some of the frequently asked questions tenants ask about the rent collecting process.
Q- How does a property management company typically collect rent?
A- While some property management companies may accept checks, most offer direct debit for tenants. Direct debit tends to be a much smoother process and the old excuse “the check was lost in the mail” won’t crop up. The direct debit process lets you know if you have the necessary funds ahead of time, which is a nice bonus feature.
Q- What is the typical late fee?
A- The answer to this question will vary based on how the property management company decides to handle late fees. Typically a property management company will have a late fee that falls anywhere from five to ten percent of rent. Some companies will do a small daily fee as an incentive for the tenant to pay rent. Whether you are working with a condo property management company, retail management company, industrial property management company, the primary function of a late fee always remains the same. The function is to get tenants back on track to begin making their payments as soon as possible. The fees are meant to reflect the fee that a homeowner would receive in the event that he or she is late on a mortgage payment.
Q- How does a property management company handle delinquent payments?
A- Make sure you find a property management company that runs a tight ship and has a firm, but still fair, process on how they handle delinquent payments. It is important that a property management company enforces all aspects of a lease, otherwise tenants will take advantage of the leniency. Once a property management company figures out that a tenant has trend of delinquencies, they need to keep a close eye on the tenant to make sure they get back on the right track.
Q- How does a property management company deal with evictions?
A- A good property management company will have a well-documented process and will determine the very best course of action based on the circumstances. They should have a checklist that they go through with you that explains the process they go through each time before deciding to evict a tenant. As a tenant, you always want to make sure you are dealing with a company that acts fast and documents all of their actions.
Q- Do property management companies provide eviction insurance?
A- Eviction insurance is basically just a small monthly fee that insures the management company will pay for attorney and court costs that are associated with evicting a tenant. This is not a service that is offered by all property management companies, but it sure says a lot about the confidence a property management company has in their tenant screening process.
Have a rent collection question that we didn’t cover? Feel free to leave us a comment or contact us.