AAOA Blog

It’s tough when you get ripped off by your tenant.  But it adds insult to injury when you turn to a collection agency for help collecting the debt, only to learn they are taking advantage of you.

How do some collection agencies take advantage of unsuspecting landlords?

In short…by not showing you how to collect the debt yourself before turning it over to them.

Here’s the skinny on collection agency tactics:

• Professionals in the debt collection industry know that a small percentage (5% -15%) of delinquent tenants will respond and pay immediately when they are contacted by a collection agency. 

• Collection agencies are required to send a collection letter to the last known address of the debtor, before reporting the debt to credit bureaus.  A predictable number of people will respond and pay their debt immediately, because they don’t want their credit to get ruined.

• The collection agency only spent a few dollars pursuing the debt, but you get a bill for 50% of every dollar collected.

Unscrupulous collection agencies call this tactic “creaming the easy ones”.

What they don’t tell you is…you can do this step yourself!

Here’s How to “Cream the Easy Ones” yourself:

1. Go To:  http://www.bestrentcollection.com.
2. Click on “Flat Fee Based Collections”

It is free to register.  You can send one collection letter for $16.95 or three for $26.95.

If the debtor does not pay, they will be automatically reported to the three major credit bureaus as part of the service.

The whole intent here is to generate a phone call from your debtor.  If they do not call within 60 – 90 days, they probably won’t.  THEN you can turn them over to a collection agency for collection on a contingency basis, and make the agency work for their fees!

Debt collection begins when your prospect walks through the door.  Click here to read our series Seven Vital Tips To Help Maximize Your Debt Collection.

For help with debt collection, email collection@joinaaoa.org.

American Apartment Owners Association offers discounts on products and services related to your commercial housing investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing.  Find out more at www.joinaaoa.org.

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Tags: tenant+debt+collections, don’t+get+ripped+off+debt+collection, apartment+owners+associations, landlord+associations

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