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Home · Property Management · Collections : Winning the War Against Deadbeat Tenants

collecting tenant debtSometimes landlords give up too easily — like when it comes to pursuing a tenant who skips out without paying the last couple months’ rent.

Landlords often feel powerless when facing the prospect of legal action against a bad tenant. After all, how will they find the deadbeat? Is it worth the hassle?

Backing down only encourages tenants to repeat the pattern. Eventually, it will catch up with them — but only after a landlord decides to take action.

Protect yourself from a deadbeat tenant:

Always demand a completed rental application, including personal reference and emergency contacts. That information creates a trail to their door, and makes collection possible.

Keep good documentation, including rental payment records and receipts for damage. This habit alone can make it much easier to win a judgment against a bad tenant.

Don’t get discouraged. A significant percentage of tenants will pay right away once they realize the landlord is serious about collecting what is owed.

The traditional collection company is not the only option for collecting delinquent tenant debt. AAOA members have an advantage when it comes to debt collection. Rather than agreeing to pay as much as 50% of the debt to a collection company up front, AAOA members can first send automated collection letters through a collection agency, and keep whatever they collect from the tenant. To access this service, go to RentRecoveryService.com, and choose Flat Fee Collection.

Another mistake landlords make when dealing with debt collection is thinking that once the debt is a few months, or even years old, they are powerless to collect. Collection laws favor landlords when it comes to collecting delinquent rent. Many states allow the landlord several years to collect this debt, after the tenant has gotten back on their feet.

Check with RentRecoveryService.com to see if your old debts are still collectible. Your deadbeat tenant may believe they have gotten away with ripping you off €” but you may get the last laugh!

For more information on debt collection, visit our Rent Collection page.

With AAOA, landlords have resources at their fingertips. Check out our new Landlord Forms Page.

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

  • mike thomas

    why not small claims court and win a judgement?? How is a simple letter going to cause any payments to be made ??

  • Kim

    That’s a good question Mike. The reason that this works is these letters are exactly what a traditional collection agency will do — because a significant percentage of debtors WILL pay right away once they realize they are being pursued by a collection agency. The difference is that a traditional collection company will charge you a percentage — up to 50%, even if the debtor pays after simply receiving a demand letter. This system allows you to pay a flat fee of around $20 to send out the letters, and see if the debtor is going to pay right away. If they don’t, you can still go the collection route — but if they DO, then you’ve saved a ton of money!

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