How the Top 1% of Property Managers Manage Delinquency
Best practices for handling a vital task.
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Managing delinquency is critical to a multifamily community’s ability to function. Let me let you in on a secret, there’s no magic account with an infinite amount of cash stashed away to manage and maintain communities. Communities function on collecting rent, PERIOD. Rent payments cover salaries, utilities, vendors, repairs, and all other operating expenses. This is why effectively managing delinquency is critical to its success. Because of how critical it is I want to share a few tips on how to keep your delinquency low and your cash flow high!
Let’s get started—You want to make sure that you partner with a local landlord/resident attorney. There’s absolutely no way to effectively manage the delinquency process without one. In a perfect world, everyone would pay their rent in full and on-time monthly however, that’s just not the reality. You will run into residents who fall behind and a few who will stop paying altogether.
Partnering with an attorney with help you swiftly navigate through the legal processes, minimize bad debt, and/or help you get payment or possession back as quickly as possible.
Oversight—Assign a person or a role to manage the process and another to oversee it. This is important for a few reasons: consistency, building relationships/establishing rapport, and accountability just to name a few.
Delinquency should be always the top priority for one onsite team member. That team member would need to actively manage this daily. Between follow-ups, processing payments, and legal proceedings there’s a lot to be done all of which are critical to cash flow and operations. Another team member or someone in a leadership role should oversee the process, provide resources and assistance, in addition to accountability.
Now, although you’ve appointed one person or role to manage the process, and another to oversee it, it’s also a good practice to get everyone involved with collection efforts. Train everyone in the office on how to politely remind residents of their outstanding balance and ask for payment during their interactions. Having everyone on the same accord increases your chances of collecting all outstanding balances while also “training” your residents to pay their balances in full and on-time monthly.
