Collecting unpaid rent… the bane of all landlords. In a perfect world, you would avoid this situation altogether. However, there is a chance that you will be put in a position where you have to decide if you want to use a collection agency to collect your unpaid rent for you. Here are some factors to consider before making that decision.
Try to Avoid Unpaid Rent
This seems like a foolish point to make but it is worth pointing out. If you can avoid unpaid rent, there would be nothing to collect! How can you avoid unpaid rent?
- Thorough screening process. It is worth it to take the time to screen your tenants extremely well. They will be living in your rental property.
- Credit reporting affiliate program. These are a great deterrent for renters considering late or unpaid rent payments. A credit reporting affiliate program allows you to offer credit for renting by giving your tenants a boost in credit with rent reporting. It will also have them thinking twice about late rent or unpaid rent payments.
- Stay connected. You don’t have to be a helicopter landlord but staying in touch is a great way of making sure that you don’t end up needing to consider a collection agency to collect rent.
Take the Right Steps After Rent is Left Unpaid
When you have unpaid rent, there are a number of steps you can take before using a collection agency.
- Reach out to the tenant by phone to have a conversation with them about their unpaid rent. If possible, arrange a time to have the rent paid in the immediate future and discuss with them in person their lease agreement and their responsibilities around rent.
- Give them written letters, either by email or directly at the home through their mailbox. This will prove you have tried to collect the rent previous to the collection agency.
- Let the tenants know, that if necessary, you will report them to a credit agency. This can affect their credit for up to 6 years! If they have been getting credit for renting and using your credit reporting affiliate program to boost their credit with rent reporting, why would they undo all that good work by refusing to pay rent?
If You Must Use a Collection Agency…
Not all situations are the same. Some deserve a collection agency right away while others do not. What kind of situation?
- Tenant walks away from a lease or gets evicted. Immediately to collections!
- Tenants end lease with money owing (keys, last rent, etc.). One month before collections!
- Tenants breaks lease early (without negotiating). Two months before collection!
- Always attempt to collect the rent.
- Make sure to have all of the necessary documentation before going to the collection agency.
- Work with a reputable collection agency.
Tenants Who Get Credit for Renting are Less Likely to Leave Unpaid Rent
Tenants who enjoy the benefits of a credit reporting affiliate program are less likely to make late payments and leave unpaid rent. Let them boost their credit with rent reporting while you protect your investment with CreditRentBureau.com. Let them help you and your tenants! Reach out today at CreditRentBoost.com.