An advocate platform could be the payoff for rent delinquency issues.
There are currently about 6 million people in the United States behind on their lease payments, and they owe an average of $2,250 each, according to the latest data from the Census Household Pulse Survey. That’s about $13.5 billion of income that should be in the bank accounts of owner/operators.
Even without a pandemic, lease payment issues can be constant because of fluctuating national or local economic conditions, as well as other problems faced by residents and their families. Since the problem is unlikely to ever go away, the best approach is to find proactive ways to mitigate the damage to net operating income (NOI) and bring both residents and owner/operators to a workable solution.
Success with this approach is best accomplished with a solution that makes the process less confrontational, offers a path forward and still meets all the various legal requirements that owner/operators will encounter in different states and municipalities.
Because of the emotion involved with delinquency and possible eviction, it’s best if community management teams are removed from the process. Using a third-party system can reduce the chances of confrontation and negative consequences.
An advocacy platform means residents will speak to a person who encourages them to address the issue and achieve a resolution, as opposed to dealing with a situation that has already spiraled beyond that.
One of the keys to solving a problem is to understand why the problem is occurring in the first place. Advocates can discuss what is happening, whether the problem is short- or long-term, and if the resident has already discovered a solution to get themselves back on track. This also offers the chance to educate the resident on alternatives and suggest alternatives, such as loans or debt consolidation, that can offer not only immediate resolution but a preventive measure against any future issues.
Reminders and notices sent via text, email or in-writing are an important component in making sure that residents are consistently informed of expectations or agreement. Reaching a successful resolution and avoiding a possible eviction scenario is something that all involved parties would prefer. An advocate is focused on helping everyone succeed, so they can make sure that residents receive notifications in a timely manner and with the same human touch.
Making sure all the legal bases are covered is critical in a delinquency situation. Differences among states and municipalities have always existed and COVID-19 has already made this situation more chaotic, with changes to rules being the only constant. Rather than a management team trying to keep up with the current legal standards for their community, an advocate will make sure an owner/operator is following all legal requirements when it comes to delinquency, collection and eviction.
Eviction, while sometimes very necessary, is never the preferred avenue. Finding a solution to delinquency is better for NOI because the costs for resolving the problem costs less than carrying out an eviction. There’s a better chance of recovering payment from someone who still has a home than someone who has been forced out. Once that happens, unpaid rent becomes a low priority for the resident and the operator incurs the cost of trying to lease the space again.
From a marketing standpoint, a third-party advocate can be a boost to any community’s reputation. If a company becomes known as a problem-solver, they’re more likely to get positive online reviews, as well as earn the respect of current residents. Renters will choose to stay in a place they trust rather than risk a different place that may not work with them if an unexpected problem arises.
Delinquency and evictions are unpleasant processes for residents, community teams and owner/operators. Why deal with the stress if it’s not necessary? A third-party advocate platform is the best route to avoid headaches and achieve results.
Source: Multifamily Insiders
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