Getting past-due rental payments from a resident is never fun and can be extremely challenging. While you might expect backlash from your overdue renters, with some smart maneuvering, you can turn it into a positive renter experience.
When you think of a debt collector, it’s easy to picture the TV stereotype of an intrusive man who constantly calls, threatening the person in debt. While you undoubtedly do not handle overdue rent and fees like this, it’s important to understand that many residents picture active collectors as this TV stereotype. Those who don’t take this strong-arm approach (by only sending mail notices) are often ignored, as if their debt will naturally fall through the cracks. So the big question is: what is an effective way to collect past-due rental payments in a positive manner?
Ultimately you’re going to want to approach your resident’s collections as if they were a negotiation. This doesn’t mean that you’re compromising on how much your renter owes. It’s about treating your resident in a way that doesn’t seem intimidating or passive. Rent Recovery Solutions, a nationally recognized collection agency that specializes in delinquent rent collection, coins it as “respectful recovery”.
As always, this sounds easier than it is. Anthropologist William Ury points out in his TedTalks that “when we’re involved in conflict, it’s very easy to lose perspective. It’s very easy to react.” When approaching a renter about their unpaid balance, you should not only remain respectful, but try to maintain a neutral perspective. The moment your resident obtains a ‘me against them’ mentality, it can be extremely difficult for them to prioritize paying their overdue balance. By using a common identity to lead your negotiations, you can create a “win-win” solution for you and renter.
Whether you use an in-house collections system or a collection agency, it’s vital that you consider how collections can affect your property’s reputation. By treating your delinquent residents with respect when performing collections, you get one step closer to obtaining any past-due payments. If you’ve discovered that past-due rental payments are widespread in your community, take a look at your payment process. By enabling options like online or automatic payments, the time and money you spend on collections can be significantly reduced.
How do you handle obtaining overdue rental payments? Is your collections in-house or through an agency?
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