Monday, March 27, 2006
How to Get the Rent on Time
Part 1
this is from robert cain...sounds pretty cool
The below is written by Robert Cain:
How would you like a way to get the rent on the first day of every month? Assuming that's when the rent is due, most landlords would. I had heard of the following technique several times, but had never tried it myself, and had never seen any evidence that it was effective.
Now I have the evidence. Subscriber Bill Rigdon swears by it. He says that ever since he instituted this program he has his rent on the due date come hell or high water.
He calls this technique the "prompt payment refund." It is simple. The landlord refunds fifty dollars of the rent if it is paid on the day it is due.
It is important to understand what this is not.
First, it is not a discount. The tenant does not pay you less rent because he paid it on time. Suppose the rent was $750 per month, and your prompt payment refund was $50. The tenant would pay you the full $750, then, when the check cleared, you would refund $50 to the tenant. Obviously, if the tenant paid cash, you could refund it on the spot.
Second, you don't need to charge a late fee. That is built in. The problem with a late fee is that in many states you cannot evict a tenant for nonpayment of rent for failure to pay the late fee.
Many landlords have resorted to using Section 8 because they know that their rent check will be mailed on the first of every month . But what happens if the first is on a Sunday or a holiday. The check won't be mailed for an extra day.
Bill says his rent is in his hands on the day it is due, no matter what day of the week it is.
He tried $25, and found that that amount wasn't enough of an incentive for the rent to get there on time. Fifty dollars seems to do the trick, though.
This program will not work with government assisted housing, but that doesn't bother Bill Ridgon: he doesn't rent to Section 8, anyway.
Part 1
this is from robert cain...sounds pretty cool
The below is written by Robert Cain:
How would you like a way to get the rent on the first day of every month? Assuming that's when the rent is due, most landlords would. I had heard of the following technique several times, but had never tried it myself, and had never seen any evidence that it was effective.
Now I have the evidence. Subscriber Bill Rigdon swears by it. He says that ever since he instituted this program he has his rent on the due date come hell or high water.
He calls this technique the "prompt payment refund." It is simple. The landlord refunds fifty dollars of the rent if it is paid on the day it is due.
It is important to understand what this is not.
First, it is not a discount. The tenant does not pay you less rent because he paid it on time. Suppose the rent was $750 per month, and your prompt payment refund was $50. The tenant would pay you the full $750, then, when the check cleared, you would refund $50 to the tenant. Obviously, if the tenant paid cash, you could refund it on the spot.
Second, you don't need to charge a late fee. That is built in. The problem with a late fee is that in many states you cannot evict a tenant for nonpayment of rent for failure to pay the late fee.
Many landlords have resorted to using Section 8 because they know that their rent check will be mailed on the first of every month . But what happens if the first is on a Sunday or a holiday. The check won't be mailed for an extra day.
Bill says his rent is in his hands on the day it is due, no matter what day of the week it is.
He tried $25, and found that that amount wasn't enough of an incentive for the rent to get there on time. Fifty dollars seems to do the trick, though.
This program will not work with government assisted housing, but that doesn't bother Bill Ridgon: he doesn't rent to Section 8, anyway.
