Tips for Successful Rent Recovery | Webinar with Robert Locke (Property Management Industry)

Tips for SuccessfulRent Recovery

AppFolio

Complete Solution Includes:

Web-Based Property Management Software

•Property management and accounting

•Online rent collection (free)

•Prospect / guest card tracking

•Marketing

•Website

•Payment processing

•Online applications

•Resident Screening

So You Run A More Successful Business

NARPM® welcomes you to the August webinar

NARPM® is the professional, educational, and ethical leader for the residential property management industry.

For more information go to www.NARPM.org

Presenter:Robert M. Locke, RMP, MPM

Real Estate Professional

Objectives

• Examine the Opportunities with Rent Recovery

• Establish Criteria for a Rent Recovery Department

• Evaluate Steps to Creating a Successful Rent Recovery Business

Pre-Screening Residents Prior to Move-In

• You can report and receive information about a renter’s rental payment history through Experian RentBureau

• Rental payment history looks at how well an applicant has historically paid their rent in addition to raw credit.

• Renters who have a prior history of skipping out on rent are more likely to be repeat offenders.

Best Kept Secret of Property Management

There’s _____ ____________

in property management

the way the b___________ c_________________

does it.

Stop Thinking You Are A Property Manager

BusinessReal EstateProperty Manager

Real Estate

Business

New Business to Consider

Collecting outstanding balances left behind when tenants move out

RENT RECOVERY

A Question to Get Us Started

What do you do with unpaid balances after move-out?

• Unpaid Rent

• Late Fees

• NSF Checks

• Unpaid Utilities

• Damages

• Missing Keys and Garage Remotes

• Trash Out

Polling Question:

What do you currently do with outstanding balances after move out?

A. Nothing ... toss them into a drawer.

B. Turn them over to a traditional collections company.

C. Send them letters and chase them for a while.

D. Turn them over to the owner.

Excuses I used to avoid

• “Collections” Carries a Negative Image• You Can’t Get Blood Out of Rock• Someone Might Get Mad At Me• I Don’t Know the Processes• I’m Afraid of Courts / Lawyers• I don’t have Time for Another Business• There’s No Serious Money Chasing Tenants After

Move Out

Polling Question:

Why aren't you chasing these balances?

A. I'm fearful of courtrooms/attorney's.

B. I don't know how.

C. There's no money in it.

D. I'm to busy.

Cash Recovered to Date

Your Property Management Model Makes a Difference

•Managing Low Rents•Managing Low Credit Scores•Loose Qualifying Guidelines•Sloppy Management Processes•Managing Transient Areas•No Charges Built Into Your Lease

Make Pursing Them Worthwhile!

Polling Question:

A. They expect me to chase them and collect them.

B. They expect me to turn the files over to them.

C. Nothing ... toss into storage. 

What does your owner/client expect of you regarding these balances?

Get An Agreement with the Owner

•Remember Your Agency Duties•Not Every Owner Wants to Chase •Lay Out Your Rent Recovery Steps•Outline the Risks•Get Owner’s Instructions in Writing•Don’t Exceed Your Authority

Remember: Some Agency Duties Extend Beyond Your Separation with the Owner.

Start with a Series of Letters

• Start Soft and Friendly (DL)• Start Using Stronger Language• Explain Potential Consequences for Ignoring your

Noticeso Mark their Credito File in Courto Judgmentso Garnishments

• Give Timelines to Solve

Offer Settlement Options

• Offer Payment Plans (code for Promissory Notes) VIP

• Converting a C__________ to an A____________

• Offer to Settle for a Cash Payment

Mark Their Credit

• Join a Credit Reporting Service (DL)• Get Your Tenant Screening Provider to Help you• Use Rent Recovery

Polling Question:

A. I give them to a 3rd party to do the eviction.

B. I give them to an attorney to handle.

C. I handle them myself.

D. We don't have any evictions.

How do you handle evictions now?

File in Court

• Same as Eviction• You Don’t Need a Lawyer• Tenants are Afraid of Court• Drive to Settlements

• Recorded on their Credit• Perfect your Judgments

o Attach to Their Incomeo Attach to Bank Accountso Attach Real Estateo Attach Car Titles

Process Your Judgements

Fair Debt Collection Act

• It’s Shorter/Smaller than Your Landlord Tenant Act• Drives Courtesy• View it as Your Armor• Pays a Lot Better than Property Management

Who is Going to Teach You?

• RentRecovery.com• County Clerk’s Office• Judges• Your Attorney• The Tenant’s Attorney• You’ll Learn From Your Mistakes• Don’t be Afraid• It’s a Long-Term Residual Business

Some Real Experiences

• Receiving $11,000 Check With No Name• Cosigner Pays $27,000 after Second Letter• Tenant Signs Note for $7,500 at $50 a Month and

Pays Off After 3 Months• Filed an I-9 and 6 Years Later Received $9,750• Tenant Hires an Attorney / Prepaid Legal

Ethics: Who Gets the Money?

• Give It All to the Owner?• You Keep it All?• He Who Pays the Expenses and

Takes the Ricks should get the money• Get Owner’s

Permission/Release• Chase Your Money but Not

Theirs• Offer Splits on What you

Receive• You Get to Apply Collected

Funds to Whatever the Tenant Owes

Excuses I used to avoid

• “Collections” Carries a Negative Image• You Can’t Get Blood Out of Rock• Someone Might Get Mad At Me• I Don’t Know the Processes• I’m Afraid of Courts / Lawyers• I don’t have Time for Another Business• There’s No Serious Money Chasing Tenants After

Move Out

Resources