What is Multifamily Delinquency Management?
Multifamily delinquency management is the process of managing late rent payments through actions such as sending out notices to residents, filing rent suits, and sometimes eviction.
The traditional approach multifamily property managers take for managing these important tasks can be inconsistent and inefficient. By not following a disciplined delinquency management process, property managers expose themselves to far greater risks such as increased expenses, creating blind spots, and negatively impacting the overall operation of the property manager’s asset.
What’s Wrong with Delinquency Management?
While nearly every property manager – or even property – takes a slightly different approach to manage late rent payments, 3 common factors represent the core problem.
- The process is inconsistent It creates a far more significant disruption than necessary for property managers. This inconsistency not only wreaks havoc on the property manager and introduces risk, but it also creates uncertainty when it comes to resident expectations, which typically worsens the problem.
- The process is not transparent. While you can quickly assess many aspects of your property, such as lead sources and credit checks for new residents, other elements take more time. For many property managers, if you want insights into your delinquent rent exposure and where things are in the process, you need to talk with your attorneys, and even then, you can’t be sure that what you’re seeing is accurate.
- The process is not easily understood. Because every jurisdiction has unique requirements, you’re typically forced to work with a variety of service providers who vary in sophistication, capabilities and approach. This means that properties, sometimes even located in the same state, are forced to manage significantly differing complexities in managing the overall process.
A Modern Approach
Solving the delinquency management process requires the integration of three core components:
- The effective use of technology to streamline the process and create transparency.
- A clearly defined, disciplined, and consistent system that eliminates emotion and inconsistency when dealing with delinquencies.
- The utilization of specialists with deep expertise in managing a highly variant, complex process.
The successful integration of these three core components provide
s significant benefits to property managers, such as:
- Lower costs associated with delinquency management.
- A consistent, repeatable process that yields better performance.
- A tighter process which reduces the frequency of delinquencies while also enhancing the overall resident and employee experience.
- Reduced risk exposure.
It can be easy to overlook delinquency management when there aren’t established policies in place. It’s important to remember, however, that following a proper delinquency management process will help you decrease evictions and increase overall profit in the long-run.