While the COVID-19 crisis has negatively impacted companies across countless American industries, few have been hit as hard as businesses in the rental property market.
According to the Bureau of Labor Statistics, the unemployment rate was 7.9% in September. This roughly equates to over 12 million people. Without jobs, such Americans struggle to pay rent. And until Congress gets its act together and approves a second stimulus check, you can expect the problem to continue.
As a landlord, you need your rental checks to meet your costs and obligations. For example, if you’re a retired landlord who runs a rental property business, you may need your rental income to pay your mortgages or personal expenses.
Of course, you also have operational costs. As a landlord, you’re obligated to pay for property maintenance and seasonal upkeep. By law, you’re also required to perform emergency repairs. For example, if your tenant’s appliances break or there’s a leaky underground pipe on your rental property that requires expensive fixes, you must find a way to pay it.
And if you’re renting out units in a condominium, then you probably have cooperative fees to pay. Condominium authorities usually don’t care if your renter isn’t paying rent — they’re ready to slap on hefty penalties if their dues aren’t cleared.
In short, you must collect rent. The question is, how?
Don’t Get Lulled into a False Sense of Security
If your rent has been paid on time so far, be thankful, but don’t grow complacent. Unemployment can strike a tenant without warning nowadays. Perhaps your tenant is already jobless and is paying from their savings. However, savings can run out. That’s why you must have contingencies in place!
- Be prepared to dip in your own savings should your rental income be disrupted
- Be ready to reach out to your financial institutions to defer payments if needed
- Learn about crisis programs designed to help those in the rental property business
- Learn about nonprofit organizations that help tenants pay rent during a time of crisis
- Catch up on local laws to learn about your options as a landlord
- Read these 5 important tips for landlords to stay prepared for the future
Don’t Be Rigid
If your tenant fails to pay rent, then be flexible. Offer options such as partial payments or lease amendments. If you can wait to be paid, then reach an agreement with your tenant about future payment terms. Perhaps they can pay a small sum now and the rest when they’re employed again.
Remember, you’re in this situation together with your tenants. The situation can raise anxiety levels and lead to unfortunate situations. Keep your cool and stay professional in order to collect rent without being the ‘bad guy’ of the rental property business.
As always, avoid using harsh or threatening language as this can be counterproductive. At Summit A*R, we have 27 years of experience under our belt. We have collected rent for various clients from numerous American industries, including the rental property industry. Over the years, we have also seen many debt collection agencies come and go.
From our experience, we know that aggressive tactics simply don’t work. Think about it. With so many creditors demanding to be paid, who is your renter likely to pay first when they have the financial means? A creditor that mistreated them or a creditor that took a more diplomatic approach?
At Summit A*R, we adopt the “P.H.D. Philosophy” (Preserve Human Dignity), which means that we treat renters with dignity and respect. Not only is our philosophy ethical, but it’s also more effective.
As a landlord, it’s critical for you to maintain records to run a rental property business seamlessly. Not only does proper bookkeeping help you manage your responsibilities, but it can be vital in a dicey situation. For example, if you give concessions to a tenant based on false claims, your records can be helpful later.
Try to communicate with your renter by email or text message as much as possible. If you have an important discussion in person, follow up on email or text message with a clear and concise record of the conversation.
Your documentation could be required during any official proceedings. If you’re making any concessions to your tenants, then you may need your records to get access to government relief programs.
Partner with The Right Debt Collection Agency
If you fail to negotiate with your renter or if you simply don’t want to deal with this stressful situation, then partner with the right debt collection agency to collect your rent. As we mentioned earlier, at Summit A*R, we get the job done without using negative tactics that can hurt your reputation. We also stay up to date with the latest laws to keep you protected during the rent collection process.
In addition, many landlords rely on our residential apartment unit collections because we’re highly resourceful. For example, we have a comprehensive skip tracing department that’s managed by a licensed private investigator.
Our skip tracing team has an unparalleled track record of locating debtors and their assets even if they’ve left the state or taken steps to hide their digital footprint. If you can’t find your former tenant, then give us an opportunity to locate them.
We also work with the three major credit bureaus to hold your former tenant answerable for unpaid dues. When debtors know that their credit report is on the line, they’re more likely to cooperate with us. They understand that a blemish on their credit report can make it harder for them to rent another place down the road.
At Summit A*R, we pride ourselves on our transparency. We deal with debtors and creditors with honesty and fairness. We realize that many landlords are in a financial crunch. That’s why we don’t demand any money upfront. We only take our percentage after we’ve collected your past due rent from your tenant. We don’t want you to spend more resources chasing down your former tenant because we know that you’re already owed a fortune in unpaid rent. Feel free to contact us today to learn more about how we can help you put your rental property business back on track without paying us anything upfront.