Data shows the average monthly Fair Market Rent for a two-bedroom apartment in Prescott, AZ, in 2024 is $1,403. That drops to $951 for a studio and increases to $2,273 for a four-bedroom rental. Those figures are considerably higher than the national average.
So, as a Prescott landlord, you should implement rent collection strategies that won't overburden your tenants yet lower the risk of late or non-payment.
This guide outlines the strategies you can follow, so read on.
Conduct a Rental Analysis
You can set a fair rental rate by performing an accurate rental analysis. It can help determine the average rent price per square foot of rental properties comparable to and near yours. Comparable properties are those similar to yours in aspects like:
- Size
- Age
- Number of bedrooms and bathrooms
- Features and amenities
- Condition
You can find such properties and their rental rates through online real estate listing platforms. Look for at least three to five units, divide their listed rental rate by their habitable square footage, and then get their average.
That should give you an idea of the fair average price per square foot you can charge.
If that seems like a lot of work, don't worry. You can get a free rental analysis by working with a reliable property manager, such as PMI Northern Arizona.
Enforce Late Fees
In Arizona, the law allows landlords like you to charge late rent fees. However, you must indicate this on the rental lease.
The statute doesn't specify a maximum limit, but that doesn't mean you should charge anything you want. Otherwise, you risk losing prospective tenants due to overpricing. Ideally, you should charge a reasonable rate; for example, no more than 5% of the monthly rent.
Incentivize Early Rent Payments
Anything that can lower your tenants' financial responsibilities to you can help them strive to avoid making late payments. An example is a small discount that incentivizes them to pay rent early. For instance, you can give them a $20 discount if they pay a few days before the due date.
Prepare a Transparent Lease Agreement
Once you've decided on a fair rental rate, late fees, incentives, and payment methods, it's time to put them all in clear, transparent writing. Your lease agreement should be easy to understand and include:
- The amount of rent (in figures and spelled out)
- The due date (e.g., every first of the month)
- Your accepted payment methods (including online or digital payment options)
- Late rent charges
- Grace period for late rent
- Charges for check bounces
- The incentives and their terms
To prevent confusion, thoroughly explain all those details as you interview and screen tenants before contract signing.
PMI Northern Arizona Can Simplify Rent Collection
As effective as the abovementioned strategies can be, they can be complex and time-consuming. However, our full-service property management company, PMI Northern Arizona, can simplify things. We can create effective rent collection policies and assist in marketing, tenant screening, lease renewals, and property maintenance.
PMI Northern Arizona is part of PMI, a larger company that has been providing property management solutions throughout the U.S. for over two decades.
So, if you want to make earning rental income as passive as possible, speak with us today. We'll happily discuss how we can maximize your rental income in Prescott, AZ!
