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For your consideration: Real Estate Profits And Losses.
Scenario 24: Keep The Math Simple With Your Tenants!

This will invariably happen to you at some point, so listen up.

You’ll get into some sort of argument with your tenants over a math-related issue:

1. How much rent they owe.
2. How much rent they’ve paid.
3. How many days, weeks or months they’re behind on their rent.
4. How many days, weeks or months they’ve been living at your place.
5. How many cats you told them they could have.

This list can go on and on. The Money Kings Tip for the landlord is the famous KISS method.

Don’t be so addicted to your accounting system or analyzing your ROI figures that wind up forgetting that your tenants probably know diddly squat about mathematics.

If your ROI is at a perfect 25% when your rent is at $636 per month, then don’t be surprised when you wind up with this type of phone exchange:

YOU: “Hey, I was calling to let you know that you still owe me a dollar for last month’s rent.”
TENANT: “Huh??”
YOU: “You mailed me a check for $635. Your rent is $636 per month.”
TENANT: “Really???!!!! I thought it was $635. I’ll give you an extra dollar next month.”

Don’t be surprised if it takes your tenant 6 months to realize they’re shorting you a dollar each month.

If your favorite number is 18, therefore you always try to make your rent $418 or $1018, so you’ll always remember, don’t be surprised if you wind up with this phone exchange:

YOU: “Hey, you only sent me $500 for this month’s rent. You still owe me $518.”
TENANT: “Yeah. Sorry about that. Times are hard, ya’ know. I’ll get you that plus the full amount next month.”
YOU: [Next Month] “You mailed me a check for $1510. You still owe me money!”
TENANT: “Really???!!!! I thought I sent you everything I owed. $500 plus $1010 . . .”

Now you’re tenant has moved from owing $500 one month to $8 the next. When you start tacking on late charges, guess what’s going to happen. You’re going to get short changed somehow. You already know this answer.

How about this one:

YOU: “I told you you could only have one cat.”
TENANT: “Yeah. I know, but that new one there is just a kitten. So I figured that it wasn’t really two cats, you know?”

OR, this one:

YOU: “It’s the 31st. Your rent was due yesterday.”
TENANT: “It’s due on the 30th, right? There’s no February 30th, so I figured I’d just pay in March.”

These situations might seem asinine. AND THEY ARE! The point is that they’re your job as landlord to control and manage. Don’t rely on your tenants to be math whizzes. If they were, then they’d probably be the owner instead of the renter!

Keep your rents in nice whole numbers of 0 or 5. Be very explicit with how many months/years for which your lease will run. Keep late charges in whole amounts and in very clear and even intervals. Keep your rents due on the 1st day of the month at all times.

Making the math easy on your tenants, will in turn make the math easy on you, bring you closer to payment, further from confusion, and free from frustration and time wasting.

Good luck out there.

Keywords: real, estate, legal, math, numbers, addition, subtraction, multiplication, divide, calendar, pets.