How to Prevent Unpaid Rent in Furnished Rentals: Tips for Landlords

Furnished rental is an attractive option for many tenants, but, like unfurnished rentals, it also comes with its share of challenges for landlords, including the risk of rent defaults. As a property owner, it's essential to take steps to protect your income and prevent defaults. In this article, we will present you with practical tips to minimize this risk and ensure the financial stability of your rental investment.

1/ Rigorous Tenant Selection

The first step in avoiding rent defaults is to select reliable tenants from the start. Here are some tips for rigorous selection:

• Conduct credit checks by requesting documents from rental applicants that can verify their identity and creditworthiness. For more information, find out in our article "How to Choose a Tenant" the details of the documents allowed for the tenant application.
• Request previous rental references.
• Meet with the tenants in person to assess their behavior.

At Lodgis, our 20 years of expertise enable us to quickly and efficiently assess the numerous rental applications we receive, both from French and foreign tenants, presenting only the strongest candidates to our property owners.

2/ Well-Drafted Lease Agreement Tailored to the Tenant's Profile

A well-drafted lease agreement is essential to protect your interests as a landlord. Make sure to have the tenant sign a lease tailored to their profile (main residence lease, mobility lease, etc. See "What Are the Different Types of Furnished Rental Leases?"). Regardless of the chosen lease, it should include:

• Terms of rent payment, including the amount, due date, and penalties for late payment.
• Rules regarding property repairs and maintenance.
• Conditions for lease termination in case of default.

At Lodgis, our expert furnished rental advisors carefully study the tenant's profile and the reason for their stay to propose the most suitable lease (in compliance with current regulations) to protect both tenant and landlord. Lodgis also offers electronic lease signing.

3/ Open Communication

Maintain open communication with your tenants. Encourage them to inform you promptly if they encounter financial difficulties. Early communication can sometimes prevent a payment delay or default from turning into a major problem.
If a delay or default occurs despite all precautions, consider mediation before resorting to legal procedures. Debt collection can be costly and time-consuming, so exploring amicable solutions is preferable.

At Lodgis, we manage financial flows to provide all our landlords with rigorous payment tracking. From the first day of delay, our customer service sends payment reminders to tenants.

4/ Rent Guarantee Insurance

Rent guarantee insurance is an option to consider. It can cover part or all of the rent in case of default, providing financial security to landlords.

To learn more about the benefits of subscribing to RGI, we invite you to read our article "Furnished Rental: Why Subscribe to Rent Guarantee Insurance?".

At Lodgis, we go even further in assisting landlords by offering a deferred payment RGI that allows them to receive their rent every month on a fixed date, starting from the first day of payment delay, without any delay in disbursement. This is a real security (and peace of mind) benefit for investment property owners who have taken out a loan and rely on rent payments to cover their monthly installments. Learn more about Lodgis's GLI.

Preventing rent defaults is crucial for the success of your furnished rental. By taking measures such as careful tenant selection, a strong lease, open communication, and strict payment tracking, you can minimize financial risk and fully enjoy the benefits of furnished rentals.
Remember that caution is key, and proactive management of your rental property will help reduce the risk of rent defaults and ensure the profitability of your investment.
Even better: you can entrust the rental, or even the management, of your furnished property to a specialized agency like Lodgis, which can proudly boast an almost non-existent default rate (only 0.63% on average).

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