Written by Jon Manschot
In property management, one of our core responsibilities is rent collection. This is the “blood flow” of a property and the means in which we maintain or increase its value. While usually our tenants simply toss their rent payments in the mail, it comes to pass that others are not as disciplined or organized when paying or adjusting their monthly amounts. When that happens, it’s up to us as property managers and accountants to resolve the issue, often drawing on personal experience and values to get the job done.
We begin by reaching out to our contacts with the tenant. With local tenants, this often entails a simple email or phone call (or many repeated attempts), followed by a payment for the outstanding balance or an adjustment to the tenant’s monthly amounts. With national tenants, this involves getting in touch with the appropriate department(s) to discuss the outstanding amounts. While both processes can become a waiting game, national tenants can easily turn it into a corporate shuffle, with each contact pointing to another to take it off his/her plate. To avoid and overcome any communication pitfalls, we rely on our persistence and mix of communication channels. We continually and pleasantly request that action be taken via phone, email and/or traditional mail.
Within the realm of real estate, we as property managers and accountants need to draw upon our own experiences and values. We must communicate openly that a boundary (or a lease) has been broken, explain why there’s a problem, and provide a solution for resolving it. Despite the variety of excuses, I find it best to be warm but firm with how we draw the line. Conversely, despite being allowed in the lease, a cold and severe response may not create the best relationship for you and the tenant. With an assertive approach, flexibility and understanding - paired with a clear delineation of what’s acceptable - are valuable tools that promote a positive relationship long-term. By our values, we can accomplish the job we set out to do, collect rent. We achieve not only a financial transaction, but an interpersonal one as well.
In short, through the collection process we add value to our properties by going beyond the standard maintenance and financial preparation. Working with our troubled tenants in a proactive and friendly way, while still setting boundaries, we help maximize the value of our clients’ assets and secure their trust. Using our previous value-driven experiences as frames of reference, we demonstrate our commitment to our clients and ourselves. And if nothing else, at the end of the day we’re here collect what is owed. That’s our bread and butter. As one property manager articulated, there’s nothing more pleasing than a clean accounts receivable.