Why are we afraid to collect rent from our Residents? By Jolene Sopalski
Delinquency is such a dirty word in our industry that sometimes I feel like my mom should have washed my mouth out with soup for saying Delinquency! How did we come to feel that Delinquency is such a dirty word for us? It’s a word that keeps Owners, Management Companies, Managers, and Assistant Managers awake at night for fear of it. Here's how I think it happened!! We started freaking out when occupancy started falling and the bottom fell out of the economy!! We didn't want to offend our residents for fear of losing them, so we just ignored the late rent! And our residents learned to pay their rent later and later!! We as property management, owners, and managers set up a cycle that is unacceptable!! In some weird wacked out way over the past two or three years we have given the residents the power over us for fear that if occupancy drops we will be in financial ruin, fear of a Fair Housing Lawsuit or our jobs will be threatened (I see this more often than not in this industry but that is a whole other issue in itself!).
It’s time to take a stand and regain control of our community. In reality we ~the management team ~ are sort of like parents and our residents are like our children, who we guide and discipline. Seriously, think about it and you will totally get what I’m saying in regard to that statement. In addition we are managing a Multimillion Dollar asset and we as Property Managers, Assistant Managers, Property Management Company’s, Owners should be managing like it is our money is not being paid. After all the money we take in is what pays our paychecks right? And without the rent, we have no money to spend on resident parties, maintenance and office supplies, landscaping, etc.
I recently started working at a property where the residents were not pushed to pay on time and were allowed to pay whenever it was convenient for them. They were not even required to pay a late fee, I know that is insane! A lot of money was just being let out of the door. I found this to be unacceptable as did my Property Manager, who had just started a month prior to me. Luckily I have no problem telling someone they have to pay rent or I will file for eviction. I have had the privileged of cleaning up accounts and enforcing the lease guidelines. It has not been easy in fact I spent my first two months working 10-12 hour days just to fix the mess~~yes, it WAS a mess. At first I was getting called lots of colorful names and a few complaints about my notices. My favorite was when I put out notices with a moving truck that said “Are you packing yet? Eviction procedures will begin on the 15th!” I was told not to send that one again because of the very tiny small customer complaints. Let’s just say that after a month of being fluffy, sweet and nice ending with a high delinquency, I now can live up to my nick name of ‘JoJo Soprano’.
Collecting on your delinquency can be frustrating and annoying but it will allow you to see a growth in your economic occupancy and getting rid of those pesky loud non-paying residents. Sure your occupancy is going to take a hit but it just means your leasing team is going to be challenged more to lease those eviction apartments quickly so they are only vacant for a short time.Here are some tips to collect on your delinquency:
1) Do Not Be Afraid to give a deadline of when past due rent is to be in with late fees. If we keep allowing our residents to brake the lease terms we are not doing them, ourselves, or our owners any favors. In fact we will hurt everyone involved in the delinquency process. You have the right to file evictions on anyone who has not paid their rent per the lease contract.
2) Use local resources like your banks to set up financial planning classes at your property. I have learned that sometimes residents just do not know how to budget their money so that they are always paying on time. Make sure the class is always at the first of the month, this way if a resident comes to you needing to do a promise to pay you can say I will only accept it if you go to this class. Once they get hooked on the classes and see the changes they will keep going. Make the resident responsible for fixing their budget and paying you on time.
3) Use Email, Social Media, Text Messaging, Flyers, and Bandit Signs as a way to communicate with your residents. Send out reminders: rent being due in 5 days, rent will be late in 24 hours, rent is now late, please submit your payment in the form of certified funds with late fees, last day to pay before Evictions are to be filed. All of these can be done and actually work. Bandit Signs at the entrance and exit of your property will be seen by everyone. My favorite saying to put on them is ‘Stop Did you pay your rent today?’ I’m still trying to talk my boss in letting me get a big flag banner that says this. The point is to use all of the tools you have to collect rent on time.
4) Remember to say Thank You when a resident pays their rent late or on time. A thank you will go a long way. The more you tell them you are so grateful to them for paying their rent the more likely they will continue to pay on time or start to pay on time.
I know it can be scary to collect delinquent rent and to follow the lease terms because you do not want to offend anyone or have them move out. But we have to do this~~it is part of our job! I don’t know about you but I get a rush every time I see my economic occupancy go up and my delinquency go down. After working really hard to re-train my residents on paying on time, I started the month with 12k less delinquent rent than the previous months. To me that is a big accomplishment and I know that they are starting to hear me.
If all else fells you can just get a U-Haul Truck with a banner that says ‘This could be yours if you do not pay your rent on time!’ It is time to take back our properties! I challenge everyone to stand up and expect Residents to pay their rent on time. Accept no excuses!! And evict a resident for non-payment!
Professionally Edited by Gerry Hunt
