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Having a good rent collection process and tool is essential if you want to run successful commercial rentals. It’s not enough to just collect a check each month, commercial tenants expect a high level of professionality and as such it’s a good idea to explore the modern property management software solutions currently available for commercial property managers.
Common Problems Commercial Landlords Face When It Comes To Rent Collection
Late payments
As with managing any real estate, late rent payments can cause cash flow issues and negatively impact your investment’s potential.
Rent arrears
If your commercial tenant falls into arrears it can be hard for them to get back on top. Commercial rates vary broadly, but arrears can be especially problematic for larger premises. Having a system in place that allows tenants to view their transaction history and their upcoming payments as well as pay partial amounts can give both parties financial clarity and help them catch back up.
Problems around tenant business cash flow
If a tenant has issues around cash flow (for example, they receive reduced business due to a global pandemic) this can have a knock-on effect. Landlords and property managers need to be able to track rent arrears and all communications between them in order to chase up late payments.
Inefficient or expensive payment method.
There are plenty of ways to collect rent from commercial tenants. The option you choose though should be cost-efficient, secure, and professional.
Software solution doesn’t offer rent collection for commercial property
Because of the increased liability that comes with processing large commercial rent transactions, many software don’t offer commercial online rent collection services. You need to identify those that do, such as Landlord Studio, and then make sure they are fit for your specific needs.
Tips For Commercial Rent Collection
Invoicing
Send out invoices to remind tenants of the upcoming payments before they happen to reduce the chances of late payments and so that both parties have records for posterity. With Landlord Studio you can set up automatic rent reminder emails to go out before the rent due date as well as rent reminders after the due date if they don’t pay promptly.
Collect rent online
Cash and checks are slow, insecure, and unprofessional methods of payment. Ideally, you will find professional property management tools such as Landlord Studio that allows you to collect rent from your commercial tenants as well as track income and expenses, automate tasks, and instantly generate a range of professional reports for detailed financial oversight and a better tax time.
Encourage tenants to set up automatic payments
Having software that allows tenants to set up automatic payments will mean that, unless the tenants have insufficient funds, they will not have to remember each month to initiate payments, and the risks of late and missed rent are dramatically reduced.
Keep detailed records and watch for arrears
You need to track all income in real-time. Using Landlord Studio’s rent collection tool, income is automatically tracked on a property by property, unit by unit basis in real-time in our professional income and expense tracker. This removes the need to sift through bank statements removing time-consuming manual data entry tasks.
Communicate with your tenants
Communication is key for the successful management of a commercial property. If a tenant does fall into arrears, you need to spot the discrepancy and reach out immediately. Additionally, it’s a good idea to work with tenants to get them back on track. Always refer back to the lease document when discussing the next steps and potential legal recourse.
Why Use A Rent Collection App For Your Commercial Property
A quality rent collection app or software can help with multiple factors of your commercial and residential rental property business. There are a variety of options on the market including software designed for only commercial, and some designed for only residential rental property. For example, Cozy.co, now Apartments.com no longer allows users to collect rent for commercial properties on their system.
The best solutions, like Landlord Studio, will offer an all-in-one service for income and expense tracking, lease management, invoicing, financial reporting, and of course rent collection.
Pros of Collecting Rent with Landlord Studio
- Automatic rent payments and tracking
- Automated income tracking
- You control the rent amount and due date
- Block partial payments
- Collect tenant payable expenses and deposits
- Fast secure payments made directly into your bank account
- Invoicing and receipts
- Both parties have complete payment history clarity
- Powerful property management and accounting features
- First 3 properties free
An easy-to-use professional rent collection system will help tenants stay on top of their payments while saving you time and helping you maintain a good relationship with your tenants. Having a tool like Landlord Studio in your arsenal is essential if you want to run a professional real estate business.