Belong’s Essential Guide To Property Management: Collecting Rent — and the Consequences of Non-Payment
Written ByBelong on Nov 18, 2021
Chapter 1, Part 3: Collecting Rent — and the Consequences of Non-Payment
Even when you do everything you should be doing, sometimes the situation arises when a tenant is late on their rent. This can happen despite background checks, because we are in a volatile economic situation.
So what do you do when you need to collect back rent from a tenant?
The first way to avoid this situation is by doing the best job possible vetting your tenants . That means going beyond mere background checks. A good property manager will ask for references from former landlords and do a deep dive into an applicant’s financials.
But in the worst-case scenario, there are no great solutions for collecting rent from a tenant. You’re bound to have an interaction that is awkward in the best case, and potentially hostile in the worst. Next thing you know you’re hiring collection agencies, researching lawyers, trying to find the best way out of a bad situation.
There’s a reason why the stress of collecting rent — and the idea of chasing down back rent — is the big hold-up when it comes to new and inexperienced landlords entering the market. It is the fear of being in this situation that drives many experienced landlords to employ property managers. And it is a lack of a full understanding of the risks involved that encourage many new and inexperienced landlords to decide to go it alone.
Asking property managers you’re contemplating working with exactly how they handle this kind of situation — and who’s on the hook for potential legal fees — is a critical part of a landlord’s due diligence.
This is just one of many questions, though. In a later chapter, we’ll take a closer look at all the questions you should ask a property manager before signing on for their services.
You own a home.
We have someone to ❤️ it.
If you’re looking to partner with Belong, you don’t even need to ask.
If Belong has to pay, so be it. That’s how confident they are in their ability to vet potential tenants, and how invested they are in keeping homeowners happy.
To be continued in Part 4!
Back-of-the-Napkin Math On Choosing Belong.