From a landlord's viewpoint, if someone's rental agreement expired on the first, the tenant rarely moved before then. As most residents had to be out of their existing residence by the first, most did not want to take the chance that my resident who was moving would be out by the first or that the unit would be ready. Usually this resulted in losing some or all of a month's rent in the interim while it was made ready and a new resident was found or the first of the month came around again.

After this happened to me several times, I started to analyze this first of the month business and I came up with a way to make life easier for me and for my tenants who have too many demands on that first of the month check. What I came up with was having the rent due on the 25th of the month. My rental month runs from the 25th to the 25th. This gives me five to six days to get the rent in the bank before the mortgage payment is due. That is just the beginning of the benefits of collecting rent on the 25th. Following is a list of twelve GREAT reasons not to get paid on the first:

1. Get paid from the middle of the month check, not the first of the month check when everything else is due, too. This means less competition for the money available to pay bills.

2. Get 5 to 6 extra days to market the unit after a move-out, thereby catching someone who hasn’t made a decision or has something go wrong with the deal they made with someone else... or their new unit won't be ready and they have to move NOW.

3. Get 5 to 6 days extra to make the unit ready for the tenant who has to be out of their present rental by the 1st.

4. Pick up at least 5 extra days rent. If your new tenant wants to move in on the 1st, you say "All our contracts begin on the 25th" and lead them gently into the realization that they pay not only for the time they live in the unit but for the time the landlord has the property off the market waiting for them to move in... and if they do not wish to pay, then they run the risk of someone more acceptable coming along and putting in an application to move in that very day!

5. Get a tighter time frame to negotiate begin date of rental agreements. The applicant always wants to start on the very latest date possible to save money while the landlord wants to begin the agreement as quickly as possible to make more money or stop the loss of money due to vacancy as fast as possible. For example: the landlord makes a statement like "there's always overlap in this business" puts the tenant in the right frame of mind to negotiate days. The landlord might say: "Today's the first. You want to move in on the first of next month, but all our contracts begin on the 25th. The owners won't allow me to take the property off the market and lose 25 days. Maybe we can meet somewhere in the middle. Let's start on the 10th. That will give you plenty of time to move small things, get utilities on, etc. Is that fair?" Effectively you've negotiated down to one-third of the month versus what they wanted.

6. Get more "float" on your money. Most mortgage payments are due on the first, but are not considered late until after the 15th. If you collect your rent on the 25th, presuming you make your mortgage payments from rents collected, that gives you 5 to 20 days of "float" on your money. If you do this, though, always have back-up plan like a credit line with a checkbook.

7. Find out sooner that you have a collection problem. When rents are due on the 25th, you'll know by the 26th that "Houston... we have a problem." Now you'll have 5-6 days to arrange other funds to make your mortgage payment if it will take that long to collect.

8. Get to the courthouse ahead of everyone else. I teach that you should begin your eviction proceedings as quickly as possible, but no later than five days after the rent is due. This gives you time for any state required notice period and wait/see if their promise to pay happens before you file. On the day when everyone else is just collecting and discovering problems, you are at the courthouse filing your eviction proceedings. The line is pretty short.

9. Get your eviction lawsuit served quicker. When you file on the first, the Sheriff or Marshall is not as busy and can get your proceeding served quicker because they are not as overloaded.

10. Get to the judge quicker. Since you got your eviction served early, the court calendar is not as crowded, so, in many cases, you'll get on the calendar quicker and the court may not have as many cases if you get that far.

11. Get them out quicker. If you have to go all the way to a set out of the tenant from the property, it may work in your favor that the Sheriff's or Marshall's schedule is not as crowded, thereby speeding up the timing of your actual set out. Because you are 5-6 days ahead of the landlord herd handling their collection problems by dispossessory or eviction action, you are actually ahead of the time of month when there are lots of evictions scheduled to be handled by the appropriate law enforcement agency.

12. Get your property back to market ahead of everyone else. It may work out that you'll have your property back and ready to rent sooner than others who wait until the 1st to collect rent because of the extra time you give yourself by collecting rent on the 25th. You therefore lessen the competition you'll have in renting your unit.

So now you know why I am sold on the idea of collecting rent on or before the 25th. Some folks ask, "hey, if the 25th is good, the 15th could be better." Maybe that would work better for you. We collect all rents on the 25th because that’s what I started over 16 years ago. I haven’t found a good reason to change that date. Yet another reason why we collect and proceed on rental collections between the 25th and the 1st is that our loan collections are due on the 1st. Private loans, Agreement for Deeds (Land Contract), owner financing mortgages, small loans, etc. are all due on the 1st so it balances out the work load of collections and allows us to focus. Let me know if this works for you.

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