Ideally, landlords will have excellent tenants that are always on time with their rent. When there are streamlined, easy-to-use rent collection methods available for those living on the property, this is usually not a problem. The method of rent collection needs to be made clear in the lease agreement, so the renters do not have any confusion over how and when rent needs to be paid. Most of the time, the occupants will pay their rent each month when it is due.
However, as anyone who has been in the business for any length of time knows, we do not live in an ideal world. Sometimes, renters will not pay their rent on time even when they have the money available. Other times, an occupant might move out of the property after having caused damage and not want to pay for the repairs for one reason or another. In these cases, the money still needs to be collected. However, it’s not often easy for landlords who are trying to manage it all on their own.
Sometimes, this means sending the resident to collections. While this will generally be a last resort, it is sometimes the best course of action to take. This is especially true when the landlord and the property management company are unable to get the money they are owed for the back rent or damages on the property.
How FaraneshReal Estate and Property Management Handles Collections
We strive to ensure that our clients have peace of mind when it comes to their properties and their money. To help with this, we make sure that we handle collections the proper way from the very beginning.
The Right Renters
One of the best ways to avoid collections is by starting with the best tenants. When landlords have quality residents in their properties, there is less of a chance of rental and collections issues in the future. One of the key goals of Faranesh is to find the tenants that are best-suited to the property. Part of this is tenant placement screening before they rent. Screening through the applications, credit checks, background checks, eviction background screenings, housing verification, and employment verification. With great renters, the risks tend to be much lower.
First, Last, and Deposits
One of the best ways to avoid ever needing to send a renter to collections is by collecting money upfront for the first and last month’s rent. Requesting a higher deposit is also beneficial. If the price of the rental is $1,500 a month, for example, we would collect $1,500 for the first, $1,500 for the last, and a deposit of $1,500. This initial collection of $4,500 would reduce the risk of needing to send the tenant to collections.
Contacting the Occupant for Past Due Money
In some cases, the tenant might not be fully aware of the problem. Late payments can happen on occasion for one reason or another. When this happens, it is important to charge a late fee. Late fees will help to incentivize paying on time. Otherwise, there is the change of dealing with future late payments from the occupant when they do not think there are consequences for being late. It is important to have the late fees clearly written in the agreement, so the tenant is aware of the issue.
In the lease agreements we have, there will be clear information on all of the requirements for paying rent. This will include the amount of the rent, when it is due, and the late fees that will be accrued when the rent is not paid on time.
Contacting the inhabitant and letting them know the situation is always important. Additionally, the renters need to be contacted per the guidelines of the Fair Debt Collection Practices Act. Since most landlords are not aware of these practices, such as only being able to contact the consumer (the renter in this case) about the money between 8 AM and 9 PM, some laws are violated unknowingly and that can lead to serious issues. We understand how best to contact the resident and how to ensure it is done in accordance with the law. We also know when it’s time to turn things over to a collection agency.
Collection Agencies When Needed
It is not always possible to get money from the renters simply by requesting it. In those cases, we will take the steps needed to bring them to collections, so landlords do not have to worry about their money.
Although sending them to collections is typically a last resort, it is sometimes the only option that’s left. No one wants to be in collections because it can have a negative effect on their credit and make it more difficult for them to find a place to rent in the future. However, it might be the only available option. We can determine when it’s time to bring them to collections. Once they are in collections, the professionals can take care of getting the back rent or money for the damaged property.
Keeping You Aware of the Situation
We believe that you should always be kept aware of what is happening on the property including the collection of rent and money that is past due. This will ensure you understand whether there are issues with the tenants paying what is owed whether they are still on the property or after they have left. We will also make you aware of what our team is doing about the problem so you do not have to worry.
Get in Touch Today
Property management companies can provide you with all of the help you need to remove the hard work of operating your properties. We can take care of everything that’s needed from the marketing and finding tenants, collecting rent, and dealing with taking the renters to collections if it comes to that. Get in touch with us today to see how we can help you with your rental property needs whatever they might be.