Did you know that insurance claims for rental arrears spike in autumn? It may have something to do with post-festive season and start of a new year leaving people with somewhat of a ‘financial hangover’.
As property managers, we do our very best to minimise the risk of you suffering rental arrears. If you do have to make an unfortunate insurance claim, we’re here to help with the process.
Before we get to that stage though, here are some of our preventative strategies:
Screening tenants – Finding the ‘right’ tenant is more important than finding the first tenant. Your property manager will take care of this process on your behalf to flag any potential risk of tenants defaulting.
By the book – Maintaining correct procedures and documentation will not only ensure responsibility by law but will serve to identify any potential ‘red flags’ suggesting that things may turn sour. Procedures for tenant issues, including eviction processes, are put in place to ensure these situations are navigated effectively and dealt with promptly.
Systems and routines – Ensuring all parties have a clear understanding from the beginning of the expectation around paying/receiving rent (how much and when payment are to be made), will help to remove any grey areas. Adopting a zero-tolerance policy from the start will reduce the likelihood of problems turning into long term issues. If there is a need to change the initial agreement for payment, consider if/how this will affect tenants and ensure adequate notification is given.
Managing relationships – Having good rapport with tenants is important. A disgruntled tenant is more likely to break agreements and miss rent payments, whereas a happy tenant is more likely to have on time payments and treat your property as their own.
Considering why – If a tenant misses a rental payment, there may well be a valid reason why, such as job loss, sickness or unforeseen expenses. It is still important to follow procedures to reduce the likelihood of it reoccurring.
Unfortunately, life can sometimes catch people by surprise, resulting in circumstances beyond their control. Neither landlord nor agent rent a property with the expectation that tenants will fall behind on their payments, but if this does occur, managing the situation promptly and effectively will help get things back on track.
As they say, prevention is better than cure.