These Tips Can Help Rental Property Owners Stay on Top of Rent Collection
Categorised in: Our Blog
At Summit A*R, we help all types of businesses of various sizes recover revenue. We offer medical collections, dental collections, consumer collections, commercial collections, veterinary collections, pre-collection services, residential and apartment collections and even commercial tenant collections.
As a highly experienced and reputable debt collection agency that does tenant collection services, we’ve noticed that some landlords of commercial properties, apartments, and residents suffer from a variety of issues with their tenants. While most renters are certainly good people, a minority of them may not pay their rent on time if at all, damage the property, take part in an ill-advised activity, fail to report repair, maintenance, upkeep, or safety concerns on time. Recovering rent from such tenants can be challenging for landlords, even if their tenants are small, medium, or large-sized businesses.
Drawing on our expertise as a highly effective rental debt collectors that many landlords across the United States rely on, we’ve put together a list of tips that can help rental property owners stay on top of rent collection:
#1 Conduct Background Checks
If you live in an area with a hot real estate market, then it can take some effort to check through dozens of applicants for your rental property. However, it’s worthwhile to conduct background checks. Depending on local regulations, you can ask for following the documents to improve your screening process:
- Identification: It’s important to get a couple of documents like a driver’s license and a phone bill to verify a potential tenant’s information. Make sure that you crosscheck the data. You can usually verify most information online.
- Employment Check: You can verify their income by asking for an employment letter. Some tenants may be willing to provide bank information to prove their feasibility as renters.
- Credit Report: A credit report from one of the three leading credit bureaus can help you determine if a potential tenant is reliable. If they have recently applied for a lot of new credit cards or loans, have sizable revolving credit, take many cash advances, have one or more accounts in collections, then they may be unreliable.
- Public Records: If the applicant has been involved in minor indiscretions in the past, then it may not be a cause for concern. However, if the public record indicates that they’ve been involved in alarming undesirable activities recently, then they may be less than an ideal tenant.
- Previous Landlord Letters: Get in touch with previous landlords. Ask them if they have any outstanding debt, a history of late payments, or have disrespected the property before. It’s a glaring red flag if the applicant has been evicted previously or have been sued for not paying rent.
- Reference Letters: Check out their reference letters. Testimonials from members of the community in good standing are a good sign.
Likewise, it’s equally important to conduct background checks of a commercial tenant. Investigate to learn why they’re moving. If their business is expanding or if they’re opening another branch, then it’s a great sign. However, if they’re seriously downsizing, then consider it a red flag. Moreover, check if the business will be a good fit in the neighborhood. For example, if it’s a tattoo parlor in a family-friendly area, then the business may struggle to make ends meet.
If the business is new and hasn’t established a credit history, then see if the owner is willing to leverage their personal credit report to secure the lease. Regardless of the type of tenancy, don’t hesitate to ask for a security deposit or a co-signer for added security if needed.
Always sign a lease with a tenant. If they insist on paying cash, then move on to another applicant. The lease must be airtight and follow all local regulations with pertinent clauses in case the rules are broken in any way. It often helps to have it prepared by a professional.
Ask for post-dated checks for the entirety of the lease agreement. Try to avoid checks sent in the mail as this can result in late payments. Set late fees to incentivize timely payments. If local rules allow and the tenant wants to pay in advance for a discount, then this can significantly improve your cash flow and reduce your risk.
#4 Track Back Rent
If tenants have been delinquent with rent and continue not to pay, you should keep track of how that debt is aging and how well you’re collecting from month to month. You can use an AR Calculator to track the age of debts and your Accounts Receivable turnover.
Commercial Tenant Collection Services
While you can take every precaution, there’s no guarantee that your tenant will stop paying you rent or won’t break their lease. If their business is suffering, then time isn’t on your side. They have multiple overheads and several creditors. Your goal is to act quickly before you’re beaten to the punch by others.
At Summit A*R, we work fast when it comes to commercial tenant collections because we know time is of the essence. Statistics suggest that debt grows harder to recover with time and this is especially true for rent.
Our team is composed of licensed and experienced professionals who have been helping commercial landlords collect their dues for several decades.
Residential & Apartment Collections
If you are the owner of an apartment or any other residential property and your tenant owes you a fortune in unpaid rent, then you’re losing money every day. Moreover, until they’re evicted, your rental property business is suffering from vacancy.
At Summit A*R, we’ve recovered millions in bad debt. Usually, most tenants are happy to pay their dues when they realize that a renowned debt collection agency is involved. We use our skilled negotiation strategy to diplomatically convince debtors to clear their dues.
For particularly stubborn accounts we can resort to credit bureau reporting. Whether your debtor is a commercial or residential tenant, they’ll value their credit report in order to secure another tenancy or conduction business transactions. We offer this service at no cost to you.
If your tenant has skipped town without clearing their dues, then we can use our powerful skip tracing department to find your former tenant anywhere nationwide – even if they’re on the move. You can always use our State Resource Center to learn more about local laws.
So, don’t wait another day to collect your unpaid rent. When a rental debt goes unpaid, time isn’t your friend. Please give us a call to learn more about how we can help you with our Commercial Tenant Collection and Residential & Apartment Collection services.