New rent & utility collection method

mobile home university
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Hello everyone, I own a park in New England with 20 pads at 100% occupancy. I live 5 hours away from the property so my manager handles the rent collections which is an ongoing headache for him and myself. Besides the obvious constant chase and knocking on doors all the time, about half of my tenants are consistently late (they pay the late fee and rent eventually but are still late) while others pay partial payments for rent and utilities until paid in full. Although I’m not losing money, it has created a situation where the internal bookkeeping is a constant headache. Very difficult to keep track of everything even having very practical spreadsheets to keep up on everyone’s accounts.

My question is this…in order to get everyone on the same page and paying on time, should I switch things up and make it mandatory that they pay via mail and on time (using the postmark for the date paid) in order to avoid getting a 7 day eviction notice?

I think this way would give me more control by taking out the middle man and make my bookkeeping much simpler as well as force everyone to pay on time or move out.

Any thoughts or other ideas???

Thanks!
Mike

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The key to achieving your goal in having every tenant pay on time is not in the method of payment but rather in the enforcement of payment on time. Paying by mail is no more going to guarantee on time payment than the present method.
Landlords should never chase tenants for payment. Tenants are responsible for insuring the landlord has payment on time and if they are not doing this it is because the landlord has sent a clear message that it is OK to not pay in full on time.
It is not your tenants fault that they are not properly trained and it now falls on you to train them better. Unlike dogs people do not respond well to rewards as such you will now need to make a very clear example of one or two of them and by doing so intimidate the s**t out of all of them.
Understanding that it is your management short comings and not your tenants that are at fault is essential to correcting the problem.

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Why not open a checking account at the local branch and have them deposit it directly? Tell them to write their name or unit # on the deposit slip and you can login online to see who payed ontime. Depending on your state laws you can have the one time late fee (e.g. $50 dollars) and then an additional fee (e.g. $10 dollars) for every day thereafter they choose to pay what is owed. You may need to wait until their leases come up for renewal before you can implement this if not in place already.

You then take the manager out of the equation (who may be part of the problem), motivate the tenants to pay ontime, and can evict whoever does not pay according to the lease. Similar to what @Greg said - after the first person is evicted everyone should start paying promptly.

The new ways of working should take probably about the same amount of time you are constantly trying to organize your books today with your current process, but will pay dividends after a few months.

This is not the only way to do it, but an idea that may help. Keep us posted and good luck.

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Greg is right here. Set your late fee to the highest amount possible through state law. Here in VA we have, “reasonable late fee.” I personally interpret this as being 10%. Our collections are very good at 10%. Our parks in NC are subject to more specific rules at lower late fees and have lower collections rates. Point is, you need to set the late fee to the maximum and be consistent.

On the bookkeeping side, use a professional program. I use rent manager and I set the late fee to post automatically. There is no headache because our managers are trained to follow the state’s eviction protocol atomically too and we post court fees as they come up. Treat this like a business and your life will get a whole lot easier. Spreadsheet bookkeeping is not the answer. I’ve been there (created my own accounting software in excel) and professional programs are just light years better.

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Thank you very much for the responses. The latest update is I did a couple evictions and people got the point. I’ve also switched over to onsite property manager software which has replaced my excel spreadsheets which were nightmares to use. Now everything is automatic and people are paying mostly on time. I have a 4% late fee but will look into raising that on the new leases. Thanks for the help guys. -Mike

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@MikeO , thank you for your updated post!

Congratulations on getting the Tenants to pay!

Evictions seem to ‘help’ people remember their priorities :slight_smile:

I remember a Tenant calling my Husband and explaining why they were not able to pay the “Lot Rent” on time. The Tenant said that his child’s school started and that they had to buy school items.

While I could/can both sympathize and empathize with this Tenant (we have 3 young boys), I do not think that our bank would accept school supplies as a reason for us paying our mortgage late.

Thus, if we need to pay on time, our Tenants also need to pay on time.

Once this Tenant received their Eviction they suddenly ‘saw the light’.

After the Eviction Notice this Tenant realized that their child could have school supplies, but they might be homeless in the process.

Sometimes it is the MHP Owner’s job to help our Tenants re-prioritize their responsibilities.

We hear lots of ‘excuses’ and ‘promises’ from Tenants about sending in money.

We have learned that we do what we need to do…follow our Eviction Process…and the Tenants can do what they need to do.

Ultimately, if the Tenant really wants to live in your MHP, they will find the money.

Otherwise, perhaps the Tenant needs to live with family or friends until they figure out the whole living on their own process.

We wish you the very best!

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[quote="Kristin, help our Tenants re-prioritize their responsibilities.

Eloquently spoken.

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