While a delinquent payment from a single renter isn’t the worst thing for a property management company, problems arise when several renters are late on their payments. A single renter might have legitimate reason for a late payment and there is truly only so much you can do to control this, but to mitigate the risk of delinquent payments happening frequently at your property, it’s important you do what you can to prevent this from happening.
After interviewing ResMan customers and other industry experts on how they manage this problem, we wanted to share 4 ways you can reduce the risk of delinquent rent payments at your property:
There is a good chance your renters will benefit from a gentle reminder of upcoming rent payments. You can send communication reminders of upcoming payments due deter renters from paying late. You can automate these so property managers avoid additional manual tasks each month. Be sure to keep it friendly!
In addition, follow-up reminders can be sent to those that haven't paid before rent is considered late to help ensure maximum collection efforts. Make sure you take into account any local or state regulations around collection communication to stay compliant in your region.
If you’re looking for a smarter or more personalized communication reminder system to help prevent delinquent payments, you could benefit from an AI rent collection solution. ColleenAI’s Rent Collection analyzes data to accurately target and assist those who historically struggle to pay rent on time. Colleen’s ability to chat intelligently with renters like a property manager and through multiple communication channels can result in a 35% reduction of unpaid rent.
The easier it is for renters to make payments, the better chance you have of receiving rent on time. Enhance the renter experience by offering a variety of payment options for renters. You can also give the option for renters to set up auto-pay with these payment options, as many will take advantage of setting aside the manual task of paying rent.
Additionally, many properties offer Flex so that renters can choose when and how they pay rent. This not only helps renters split their rent according to their own paycheck schedule, but also ensures rent payments are received by the property on time. A win-win for everyone! Bonus: ResMan Payments users can easily integrate with Flex 😉
Mitigating the risk of delinquent payments should start before a lease is signed. Your team should have a thorough screening process, including applicant identity verification, financial document screening and a check on credit, criminal and eviction history. This can help you make informed decisions about applicants and ensure you are filling units with responsible, paying renters.
When you use a fraud detection provider like Snappt, which powers the ResMan Fraud Detection solution, you know you will detect fraudulent documents with 99.8% accuracy. Coupled with a screening solution like ResMan Screening, one of the most comprehensive on the market, you can be confident in the measures you are taking to fill units with renters who intend to consistently pay rent.
Depending on the state you live in and your property class, incentives may be a good option for encouraging on-time rent payments. If delinquent payments are a frequent occurrence at a property, try incentivizing renters to pay on time by entering those who pay rent on time into a drawing to win $200-$300 off next month’s rent.
While it’s not the solution for every property and the dollar amount or entry criteria can vary, some ResMan customers have reported that this type of incentive works particularly well at B and C-class properties.
A little communication and flexibility can go a long way, and while these solutions might not solve for every late-paying renter, they can significantly decrease the risk of delinquent payments becoming pervasive at your properties. By being proactive with communication reminders, offering flexible payment options, conducting thorough applicant screening, and incentivizing on-time rent payments, your properties will be in a better position to maintain financial health in the long run. An additional bonus? You also foster positive relationships with renters and strengthen the chance of a renewed lease.
Interested in how ResMan can help with this? Let’s chat.
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