If you’re thinking of renting out property in Brighton and Hove, the best way to collect your rent each month is probably up there among your main concerns.
Rent arrears do happen. But being organised and having an efficient rent collection system will help ensure you receive your monthly income on time, and enable you to respond to issues quickly. Read on for some frequently asked questions around the best payment methods if you need to collect rent in Brighton and Hove.
From the start, make sure your tenancy agreement is clear on when and how the rent must be paid. The tenancy agreement must be signed by you and your tenant and will be vital if you need to take court action over arrears.
Make sure you give your tenant copies of important documents including the energy performance certificate and the gas safety certificate for the property and the government’s How to Rent guide. You must also have placed any deposit in a government-backed scheme. If you don’t, you will find it more difficult evict your tenant for non-payment.
It’s usual for landlords to ask for the rent in advance at the beginning of each month – ie January’s rent on the 1 January. You should still make this clear in your tenancy agreement, otherwise it will be assumed that the rent is paid in arrears at the end of the month.
Most UK landlords collect rent by standing order. Make sure your tenant sets the standing order up with their bank at the start of the tenancy with plenty of time for the first payment to be made on the correct date. You may have an issue if the tenant doesn’t have enough money in their account to meet the payment, but a standing order is certainly more reliable than other methods. It also costs you nothing and involves little input from you.
Direct debits and standing orders are easily confused – but they are different. Direct debits are set up by a mandate, signed by your tenant. Unlike with standing orders, the receiving organisation can change the amount collected – so it works well for bills which change dependant on usage. Direct debits are more difficult to set up – you may need to involved a third party with extra costs.
Collecting rent in cash has pretty much died out. The drawbacks are that you need to collect in person from your tenant and cash payments leave you without a record of the transaction, if you need it later. If your tenant asks to pay their rent in cash, this may be because they don’t have a bank account – but you should perhaps be concerned as to why.
With cheques virtually obsolete in the UK, this payment method is also unusual. It is more hassle for a landlord, requiring you to take the cheque to a bank and wait for it to clear.
Inevitably, tech has brought new ways to collect rent online or through phone apps – maybe using PayPal or a credit card. These options are more common in the US. If you’re on top of the technology rent collection apps could make your life simpler, but some will involve fees.
You could choose to outsource rent collection, via a lettings agent, if you use one. There are also some bespoke rent collection services. Either option will involve fees, but will save you time if payments need chasing. Rent collection companies may guarantee that your rent will paid but you may pay more for this. If you want to go down this route, shop around and be clear on what you’re paying and the services you’re getting.
It’s pretty much impossible to completely insulate yourself from tenant arrears. The trick is to have a system for tracking payments and alerting you to issues immediately. Communicate with your tenants, and seek solutions if they have an issue, before you go down the eviction route. But if you need to do this, it’s worth knowing the process – read more on the government website.
If you’re a new landlord in the Brighton and Hove area, we can help you get on top of your rent collection – and many other issues. Give us a call to discuss our services today.
Do you have any questions about the topic above? Our team of experts is here to help in answering any query you may have.
Fueled by his desire to be the best, most reputable estate and lettings agent in town, Steve has spent his career cultivating The Property Shop. Steve prides himself on his authenticity, honesty, and knowledge-base which is emulated by The Property Shop and his team.
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