Navigating Rent Collections in Times Like These
Categorised in: Our Blog
When it comes to rent payments during the pandemic, people from all walks of life are facing unexpected financial hardships. Tenants can’t pay rent after losing their jobs, even if it’s only a temporary stint of unemployment. Meanwhile, landlords can’t pay their mortgages if their tenants aren’t paying rent.
After all is said and done, are there any winners in a post-pandemic world?
Here at Summit A*R, we know there are. Thanks to our diplomatic approach to debt collection, we understand the delicate nature of tenant debt recovery while the pandemic still affects millions of people across the country. Our experienced team of negotiators can help you navigate the laws, so you can get what you’re owed without being the bad guy.
How Has COVID-19 Changed the Country?
There’s no telling what the long-term effects of the pandemic will be, but one thing is for certain. Social distancing and shutdown orders have resulted in a mass of layoffs.
Roughly 39 million Americans lost their jobs over the last nine weeks due to the pandemic. The country hasn’t seen a joblessness rate this low since the 1930s Depression.
People who lost their jobs aren’t the only ones affected. According to the Society for Human Resource Management and Oxford Economics, COVID-19 is responsible for an average loss of nearly $9,000 for every worker. This stat includes people who have managed to cling onto their jobs but had to accept fewer hours or lower pay.
The result? The majority of people are operating with less money in their pockets, and they’re struggling to pay rent. As of April, data shows roughly 31 percent of tenants across the nation didn’t pay their rent, compared to just 18 percent from the same period in 2019.
A Compassionate Approach is the Best Approach
Sometimes, being the good guy means making compromises. While you may want to jumpstart our tenant collection services as soon as possible, we’re living in unprecedented times. Your tenants may be feeling the crunch, so jumping head-first into debt collections may ruin your relationship.
If you’ve followed these tips to help property owners find long-term tenants you can trust, you don’t want to do anything that could compromise this rapport.
Evictions — while cathartic — should be a last resort. For one thing, finding a responsible replacement tenant can be challenging enough when there isn’t a global pandemic going on. For another thing, many governors have implemented moratoriums on evictions for the time being.
So, before you call a rent collection agency, try these three alternatives first.
- Abatements. If rent payments are significantly late, you may consider forgiving some or all of the past due amount, provided the tenant pays rent on time from then on. You may consider abatements for those tenants experiencing extraordinary hardships.
- Deferrals. In this case, they can pay back the rent at a later time, either in one lump sum or over installments.
- Reductions. Tenants who received Unemployment Insurance and CARE relief may be able to pay a lowered rent amount. Speak with them to determine an amount that works for both of you until they’re back on their feet.
Admittedly, these strategies work best for large real estate companies or REITs that have the financial reserves to cover costs when rent isn’t paid. For smaller landlords who own ten rental properties or fewer, they may not be possible. You may not have an emergency fund or access to credit to offset overdue rent.
Despite their strong presence in the industry, many small landlords don’t qualify for government stimulus packages like their tenants. So, what can you do?
Turn to a Debt Collection Agency with a P.H.D.
In these situations, it can feel like you’re between a rock and a hard place, but you still have options. Our residential unit apartment collections team with a P.H.D in debt collections is here to help. Short for “Preserve Human Dignity,” this philosophy has guided us for the past 24 years.
Nobody wants to hear aggressive threats when they’re already down on their luck. Not only is this against the law, but it also doesn’t yield results. A tenant is less likely to repay what they owe you when you resort to such underhanded tactics.
We know from experience a diplomatic approach is far more successful. We have a tenant debt recovery rate that’s double the national average, thanks to our compassion, integrity, and professionalism.
Nowadays, our P.H.D philosophy has never been more apt. We treat each case with extra sensitivity, given the current health challenges and economic situation. Our tenant debt collection experts do everything to preserve the relationship between you and your tenants.
Simply put, we help you collect in a professional manner. It’s just the Summit A*R way.
Unparalleled knowledge of the industry backs our kind and fair approach. We’re currently monitoring the ever-changing guidelines on debt collection, and we follow all the local, state, and federal mandates. This ensures our tenant collection services are always ethical and legal.
Our diligence follows us when collecting commercial rent, too. As a nationwide debt collection agency, we specialize in collecting a variety of debt across a broad range of industries. Name it, and we’ll have an experienced team member ready to help you get what you’re owed.
If you’re currently struggling with your tenant debt recovery, give us a call today. It doesn’t matter if you run a mom and pop operation with just one apartment or a large rental company with hundreds of units. While the rates you pay will depend on the size and nature of your debt, we don’t have any mandatory minimums, nor do we demand any payment upfront.
Despite the changes COVID-19 has caused this year, business hasn’t changed too much for us here at Summit A*R. We’re still treating people on either side of the tenant debt collection transaction respectfully. As for landlords, we’ll continue to get your unpaid rent paid.