- Taking rent in advance can help landlords complete projects because of the lump sum, yet there are some risks associated with it
- In many countries, it is illegal for property owners to take advance rent payments for lengthy periods
- There are ways that landlords in Ghana can safeguard their finances and property by abolishing the taking of advance rent for one or two years
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There are some valid reasons why most landlords in Ghana choose to take one or two years' rent advance instead of monthly rent payment. However, some risks are also involved that most landlords may not know about. YEN.com.gh mentions them below.
It Could Be A Red Flag About A Renter's Income
If a new renter who you have never leased to before asks to pay their rent in advance, it may be because they don't have a regular monthly income If you find yourself in this predicament as a landlord, find out from the renters how they will pay for additional fees such as garbage disposal or even their next rent. Additionally, you must follow up with former landlords and employers as part of tenant verification.
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Difficult To Handle Tenants When They Break The Rules
You must repay the balance of tenants' rent if they defy the terms of the lease but have already paid their rent in advance. In light of this, landlords should postpone using the rent they have already received until after the rental period. This is not only annoying, but it may also affect landlords' finances.
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It Could Be Illegal
Collecting rent in advance might not be permitted, depending on where the property is located. The rules for collecting rent vary from country to country. Ghana's rent law states landlords can take rent advances for up to only six months. In other places, rent advance may only be permitted if it is put in an escrow account that may only be transferred to the landlord's account when the monthly rent is due.
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Less Interaction With Your Tenants
Paying monthly rent is a terrific method to stay in touch with your renters, which is vital. Even if you don't often communicate with your tenant, but they pay monthly rent, it lets you know they are occupying the space and fulfilling their commitments. Taking monthly rent serves as a helpful reminder to your tenant that the house they live in is not theirs, which could motivate them to take better care of the property.
Choose The Right Tenants and 3 Other Ways Landlords Can Manage Their Long-Distance Properties Without Stress
One problem for several landlords is how to successfully manage their rental properties when they are gone for an extended time. The good news is that by following a few guidelines, property owners may avoid the worry of always watching their backs. Landlords may need to be away from their properties for a while if they are travelling or need to take care of business, among other reasons.
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