Is your Salt Lake City rental property a business or a charity?
How to treat your Salt Lake City rental property like a business
How would you respond if someone asked if your Salt Lake City rental property was a business? I’m guessing you would obviously answer yes. What about if they asked if you’ve ever had a tenant who’s fallen behind on rent? If you’re like most Utah landlords, you will also answer yes to this question. Here’s the problem: If you have a tenant who’s behind on rent, you aren’t running a business – you are running a charity!
We all like to think of ourselves as “having a heart”, but in the property management business, excess generosity is a sure path to bankruptcy. Did you know that if your tenant falls even one month behind, there is about a 65% chance that they will never catch back up? Does that change your perspective about being strict with your residents? It should. In fact, a reluctance to be the “bad guy” is the number one reason why most DIY landlords eventually hire a Salt Lake City property management company to care for their rental. A professional manager won’t be afraid to do what’s necessary to help your tenants pay on time.
Contrary to what you may believe, the best way to encourage your residents to pay on time is to hold them accountable when they don’t. If they pay late, then charge them a late fee – DO NOT waive it. Surprised? Think about the message that waiving that fee sends. If there were no penalty for paying your mortgage late, would you ever pay it on time? If you could show up to work whenever you wanted, would you be there first thing in the morning? Of course not, but we all do things we don’t want to do because they are required of us, and more importantly, because there are consequences if we don’t. Make sure that your tenants know that paying on time is a requirement.
If you’d like more tips on how to avoid turning your Salt Lake City Rental property into a charity, then contact us today.