Think you’ve found the right apartment? Congratulations! We know the hunt can be tough, and we bet you’re ready to settle into your new place now. At this point, you’ll need to sign a lease agreement with the property manager or landlord. Among other things, this should cover your rent payment plan. While you might never need to use this, it can offer peace of mind in case any financial difficulties pop up in the future.
The rent payment plan kicks into action if you default on your rent payments, or are unable to make payments temporarily. If you don’t have one, and it happens that you can’t pay rent for any reason, you need to talk to your landlord or property manager about a rent arrears repayment plan. Failing to do this could lead to eviction.
However, having a conversation with your landlord or property manager about a rent repayment plan ensures you’ll still have a roof over your head while you get your finances back on track.
What is a rent payment plan?
A rent payment plan is a kind of payment pledge in which the tenant commits to make a series of rent or debt payments. This comes into play if you owe money on your rent. Payment plans allow tenants a chance to avoid legal action by consenting to pay a portion of past-due rent each month until the payment is complete. Best of all? Tenants get to stay in their apartment and landlords know they’ll get up-to-date on what they owe.
Is it a good idea to have a rent payment plan?
We absolutely recommend having a rent arrears repayment plan in place, to protect against overdue rent payments you can’t afford. A rent payment plan allows you to pay back your rent in installments until you can clear the backlog. This varies from one landlord and property manager to another.
However that works out for you, it means you get to stay in your apartment for longer. The good news is you won’t have to worry so much about not being able to pay rent. At least until you find a way around it.
Rent payment plan options
There are several options to consider when it comes to rent payment plans. What you settle for will depend on your financial situation and what makes both you and your property manager comfortable. Let’s take a look at the usual options.
1. Paying a lump sum at an agreed date
You can agree to pay a lump sum to cover all your owed rent at a set date. In the meantime, you’ll have a chance to build your savings for a month or two, so you can meet the target.
2. Making payments in installments
When you choose the rent installments plan, any money you owe is spread out over an agreed period. The time for repayment is usually longer. As compensation for the extra time, the landlord adds interest to the rent installment. The only drawback of this rent payment plan is the fact that you’ll pay back higher than you owed.
3. Paying at the end of your lease
You can choose to defer any rent you owe until the end of your lease period. This is even better if you’ll be getting back your security deposit in full. You can ask your property manager or landlord to use the security deposit to cover the repayment.
4. Hybrid plan
You can merge elements from the rent arrears repayment plans we already mentioned. For example, you could pay back some parts as rent installments and then choose to cover the rest as a lump sum.
Otherwise, you could pay a big chunk of the amount you owe and leave the rest until the expiration of your lease.
Why ask for a payment plan when renting an apartment?
Really, there’s no reason not to ask for a rent payment plan.
If your landlord or property manager doesn’t initiate the move, make sure you do. Consider your situation and propose a rent payment plan that’s right for you.
A rent payment plan considers your financial limitations to put together a strategy. This means you’ll be able to pay your rent, whatever challenges get in the way.
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