Landlords Being Hung Out to Dry
How to Attract Tenants That Pay on Time
February 18, 2021If you’re not asking your collection agency these questions, you’re making a huge mistake.
February 18, 2021Tenants breathe a sigh of relief after recent news of an eviction moratorium until the end of the year. There is an issue at hand that no one seems to be talking about- landlords being hung out to dry.
The pandemic has affected everybody’s livelihoods. People have lost their jobs and plans for the future have been completely thrown out the window. Many have struggled.
Landlords are no exception and their interests are not being considered.
The job market has suffered and people are no longer receiving stimulus checks. Many people don’t have money to spend and landlords are hurting because of it. More than 6 million households failed to pay their rent or mortgage in September.[1]
Others continue to work and earn income, but are taking advantage of the eviction moratorium by not paying their rent.
Landlords rely on receiving this money to pay their bills and feed their families. With a recent federal eviction moratorium being announced, renters who owe money have no pressing incentive to pay it back. Landlords are left to face the consequences.
Evictions off the table
Rental debt was already a problem. Now, a landlord’s main recourse has been taken away.
Evictions are off the table, further jeopardizing the future for many landlords and property managers. Without the threat of eviction until at least December 31, many fear tenants will take advantage and the rental arrears will pile up. Buildings may be lost. Landlords will face tens of thousands of dollars of unpaid rent they’ll potentially never see.
While tenants take a deep sigh of relief without the threat of eviction, landlords worry about their future. Christopher Salviati, housing economist at Apartment List, explained that “Many landlords operate on relatively thin margins and rely on complete and timely rent payments in order to pay the mortgages on their rental properties.”[2]
Landlords are essentially being required to subsidize the debt of their tenants – a job they didn’t sign up.
Landlords cannot afford to wait until the eviction moratorium expires to collect their debts. Even when the moratorium ends, the pandemic will most likely still be around and rental debt issues will remain. Landlords should be able to seek recourse.
Collect Their Rightful Money
Landlords have increasingly sought after outside help from collection agencies. Choosing the right collection agency is not a light decision.
Many collection agencies have not dealt with rental debts and don’t fully understand its intricacies. Without a deep understanding of how to deal with tenants, collection agencies risk debilitating the relationships that landlords have built with their tenants. It is important to carefully consider who you partner your business with.
Jonathan Abenson, CEO at Oxygen Recovery Group, understands that rental debt collection is a whole different animal. “When dealing with tenants, often we hear the tenants complain about the apartment and how they don’t really owe any money.” Given the situation, tension often rises and civil discussions can become strenuous. However, Abenson believes that “a good collector knows how to listen, show empathy and engage with the tenant to a successful resolution.”
The best collection agencies will not only maintain your relationship but will make the debtor extremely grateful for how smooth the process was. In our conversation, Abenson recalled one situation in which Oxygen Recovery “had a guarantor who settled the balance due, send in a beautiful Thanksgiving basket to the collector in appreciation for helping resolve the balance due.”
Making the Right Choice
Landlords will have to learn to live in an “eviction-less” world, at least until the end of this year. Without the threat of eviction, they must turn to alternative methods of getting paid or risk financial ruin.
When choosing a collection agency, landlords must realize the weight this decision bears – a bad collection agency could ruin your relationships and cost future earnings. Making the right choice when deciding on what collection agency to choose is crucial.
Ethical collection agencies, such as Oxygen Recovery, exist to help landlords recoup the money they deserve while maintaining a good relationship with the tenants.