TCG Florida Portfolio Reports Rent Collections at all-time-high
9/11/2012 11:09 AM
Submitted by L. Phair
With occupancies continuing to trend favorably in the Treasure and Space Coast of Florida one would suspect that delinquency rates would climb as well. With record average occupancies going into Q3 at 97%, the average delinquency rate at the close of July 2012 was less than 0.5%. Month-over-month, The Cabot Group’s Florida delinquency rate has continued to drop. How does this happen in today’s unpredictable economic environment you ask? I’d like to share seven simple strategies our professional management team has taken to complement our collections success.
1. First and foremost, we’ve established our Resident selection criteria and screening guidelines using comprehensive screening technology that analyzes applicant credit, criminal and rental history that delivers approval results within seconds. This technology helps us identify risk to bad debt using a scoring engine which in turn identifies qualified Residents and can promote timely rental payments.
2. Next, we have a clear rent collection policy. At the time of the lease agreement signing with our new Resident we review our rent payment policy and procedures with them in depth, which is addendum number one (1) of our residential lease agreement. This detailed addendum itemizes the rent collection policy which includes, but is not limited to rent due date, late fees, and collection terms and essentially summarizes our “No tolerance” policy for late rent.
3. We rolled out a single, easy-to-understand monthly statement that interfaces with our property management software ledger system that combines utility and rent charges owed. This convergent billing gives the Resident a sense of urgency, which has a favorable impact on our collection rates.
4. We accept online rental payments through our property website which provides our Residents with the convenience and option to view and pay their rent and utilities online. Our Residents can pay their rent either by checking account or by credit card and payments are captured within minutes and posted in real time. Our busy Residents love this feature and it encourages them to pay on time.
5. During the move-in process we also confirm that we have all lease holders’ contact numbers including home, work, and cellular numbers, email addresses, text ability and emergency contact data. By collecting this information upfront it can ensure successful communications between the Resident and Management Team.
6. Immediate action and consistently are imperative to our successful collections approach. As soon as a Residents’ rent becomes late we communicate with the Resident by legal notice and follow-up. A delinquent Resident then appears on our Community Directors daily dashboard for collection. We take the extra step to make certain that the Resident understands that if we do not receive the rent payment, legal eviction proceedings will begin immediately and exceptions cannot be made. We act quickly when it comes to rent in arrears so that it limits our exposure.
7. We attract more bees with honey…….We do our best to maintain a courteous and tactful attitude during the collection process; this can only help foster a sense of trust and responsibility between the Resident and the Management Team.
I asked my Community Director, Peter Ramos at Harbour Pines in Port Saint Lucie, Florida how he managed to close out the July 2012 delinquency with a whopping .91 cents, he said “I believe that the new convergent billing system is key – and at the initial interaction with the Resident they understand that both the rent and the water utility have to be paid on time in accordance with our lease agreement.”
While speaking with Robert Tindell, Community Director at Harbour Bay in Palm Bay, Florida who closed the July 2012 delinquency with $71.00 he attributes his properties success as stated, “Rent is our primary source of income, you have to be diligent and have a constant pulse on your delinquency at all times.”
In summary, the best approach to delinquent rent is to prevent it before it occurs. Outline your collection policy right from the get-go with your new Resident’s. Take advantage of all the technology that is out there to limit your bad debt exposure and be consistent with your policies - take action immediately, don’t wait.