Landlords are hiring Collection Agencies as Tenants Can’t Pay Rent
In the midst of Coronavirus, the number of people who cannot pay their rent has increased dramatically. The pandemic has brought severe financial difficulties since unemployment has reached new levels globally and landlords are experiencing challenges in collecting what they are owed. How are current developments shaping market needs and how can landlords receive their rental money in a timely manner are some of the main topics covered in the present article.
In the US we can see the first steps towards an eviction crisis with 2 out of 5 tenants being in danger of receiving an eviction notice, according to an analysis of Stout Risius Ross. Coloured or low-income tenants are particularly vulnerable and if we add the high members of unemployment it comes as no surprise that the housing market is experiencing a crisis far greater than before.
More than 40 million Americans are in danger of losing their homes due to their inability to paying up their rents. This forces tenants to demand rental relief through housing advocates, and landlords to hire Collection Agencies to collect on their debt.
What a Collection Agency can do
Normally when rent is past-due, the landlord issues a warning for the tenant that indicates that they should pay at a designated time period. But with the current developments, rental obligations have been hard for many tenants resulting in many unpaid rents and rich warning documentation between the two parties.
A Collection Agency can handle the communication with the tenant and ensure through amicable and intensive techniques the landlord’s collection on rental debt. Even after an eviction has been implemented, the delay in finding a new tenant can cost months of rental loss, which can be efficiently prevented when collaborating with a Collection Agency.
How to choose the right collection agency
Choosing a Collection Agency can be challenging for landlords who are not used to deal with financial delays on their rents making, therefore, the whole procedure more time consuming for them. In general, when shortlisting a Collection Agency you need to have two important things in mind:
1. Don’t go for the cheapest one
When choosing a good Collection Agency you ensure more recovery money. Performance can differ greatly amongst Collection Agencies, even though pricing can be fairly similar. Thus, when you are shortlisting a Collection Agency you shouldn’t choose depending on the cost alone. Agencies with superior services tend to invest more in their resources, and so be more costly.
2. Location doesn’t matter
Most people search for a Collection Agency near them, which is not an important factor. Local proximity cannot guarantee impeccable service. However, a high number of good debt collectors, high recovery rates, and a license to recover money in your area are far greater indicators of whether your needs are going to be met.
Coronavirus has shifted the way landlords deal with their tenants with rental delays and eviction notices increasing day by day. These new developments have not only rendered a Collection Agency necessary but have also influenced the entire housing market. Collection Agencies can certainly facilitate debt collection from tenants, but it’s debatable whether the housing market could recover such a crisis.