Low Income Collections

[Greg Wilkerson]

A large portion of our rental portfolio consists of low-income tenants, most of which are participants of some sort of subsidized housing program. We constantly struggle with collections. I would really appreciate any ideas for mastering collections in the low-income area. Here are some of the things I am currently trying out to see if our % will increase:

(1) Include disclaimer on three day notice which states copy of notice was sent to housing authority 

(2)  Use a third party system which allows tenants to pay rent at 7-Eleven, Walgreens etc. This includes sending an invoice via snail mail before the first of the month.

(3)  Automated email sent via PropertyWare on the first of month reminding tenants of rent obligation

(4) Have our property manager call delinquent tenants on the first Friday after rent is considered late (payday) in attempt to collect

Any ideas, tips, hints etc. are greatly appreciated. Thanks!

[Cameron Norfleet]

So I'm assuming that you're talking about the tenant's portion of the rent that's not covered by the subsidized housing program... 

At lease signing, I let the tenants know that even though the program is paying me $X,XXX, You're still responsible to pay your $XXX. If your $XXX payment is late, I will charge you late fees ($100 for the 1st day it's late and $10 everyday after that until it's paid in full). I also let them know that I have no problem evicting them if they outright fail to pay their $XXX. 

Then, follow through! THEY'RE GOING TO TRY YOU! When they do, charge them your late fee(s). NEVER WAIVE LATE FEES regardless of their excuse reason!

Also, provide them with as many ways to pay as possible. I accept checks, money orders, credit card, bank draft, google pay, apple pay, even facebook pay. I just don't accept cash. The Pay Near Me app sounds great but I don't have enough units (I think you need 100 units or more but don't quote me on that exact number).

I know that a lot of lower-income renters don't have bank accounts, but in order for them to even apply for one of my units, they have to pay their $30 application fee using one of the above methods so that throws that excuse out the window.

DON'T CHASE RENT!!! If you're not training them, then they're training you! Put your expectations out there, provide easy ways for them to abide by them and consequences if they choose not to.