Around 10.6 million people in the United States earn an income from rental properties, and landlords earn an average of $97,000 annually.
However, all this investment potential can go out the window quickly when you have tenants that don't pay rent. Knowing how to handle rent collection effectively and efficiently can save you a lot of headaches and money in the long run.
Keep reading this guide to learn what you need to do if your tenants in Charlotte don't pay rent.
What to Do if Your Tenants Don't Pay Rent
You must take several steps if you have tenants with missed rent payments. These steps include:
Keep Detailed Records and Send Payment Reminders
Start with records that show when all your rent payments are due and the date your tenants pay. This is especially important if you have multiple tenants. You should also send receipts for rent payments each month.
If you need to start the eviction process in the future, you'll need copies of all rent payments.
Finally, be sure to send a rental payment reminder. In some cases, a tenant can genuinely forget to pay rent. This is often the case after a holiday or long weekend.
Dealing with tenants who fail to pay rent is a stressful experience for landlords. Knowing the proper steps to take helps mitigate the situation. If you're facing this issue, one useful resource is understanding how online rent collection can reduce the risk of missed payments.
For more detailed information on this, click here to read our article on Landlord Tips: Understanding Online Rent Collection, which covers everything you need to know about utilizing online systems for rent payments.
Review the Lease and Rental Grace Period
Next, you'll need to take the time to review the lease agreement and grace period. In North Carolina, rent is legally due on the specified date in the lease. You can start charging late fees if a tenant doesn't pay rent on the due date.
North Carolina law states this late fee cannot be more than 5% of the rent or $15, whichever is greater. You can only charge a late fee once for each late payment.
Send a Formal Written Demand
If a reminder notice and talking to your tenant hasn't done the trick, you must send a formal letter. Ideally, it's best to hand deliver this letter, but you can also send it by certified mail.
In the letter, you must explain that the late rent needs to be paid in full immediately. Make it clear that all future rent must be paid on the due date. Failure to pay rent can also result in a court action to begin the eviction process.
Remember, it's essential to remain calm after you send the letter and wait for a response. You cannot enter their property without permission or change the locks until you go through the proper process.
Once the rent is 14 days past due, send another letter explaining that you will seek possession of the rental property.
File an Eviction
Your final step for non-payment of rent is to file an eviction. Before you file in the courts, you must notify your tenant. When you do this, you'll need to tell them the reason for eviction. Be sure to include how they can fix the issue and when they need to move out.
If the tenant still does not pay rent, you'll need to file an eviction with the courts. Once you do this, you must have the tenant serviced with court paperwork. You can do this by certified mail or have the sheriff serve the tenant.
Use a Property Management Company for Rent Collection
The best way to manage rent collection is by using a reputable property management company like Carolina Property Management. We've been helping people in the Charlotte, NC, area since 2008 with property management and real estate.
With Carolina Property Management, you'll never have to worry about rent collection. Our rent collection services ensure you receive rent on time every month. We also provide a full range of other services like tenant screening, maintenance, marketing, and financial reporting.
Make sure to contact us today to learn more about our property management services.
