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Old 09-28-2005, 06:22 AM
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Default Landlord Tip of the Week

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 before, 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.

If this sounds like something you want to try, let us at the Rental
Property Reporter know how it works.

By Cain Publications.
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