An article by Karen Herbert
With all the fabulous information available through various benchmarking reports it’s great to finally be able to see as an industry what great operators can actually achieve.
So finally, instead of property managers and business owners dismissing 0% arrears as an impossible pipe dream, they’re asking “How do we get 0% arrears?”
It is so wonderful to see the bar begin to rise across our industry.
We all remember the incredibly stern “This Agency has a Zero Arrears Tolerance”, but regardless of the market demographic, I have not seen any great success for agencies who commence their relationship with new tenants taking that position. Besides, to a tenant, what does that even mean? It feels to me, like more of an internal statement (in which case I would question the culture of the business) than something we would impose at the commencement of what we hope will develop into a successful and mutually respectful business relationship.
So, as we recognise and accept our responsibility as educators rather than authoritarians and utilise our technology to automate our processes we are finally seeing some real improvement in agency outcomes for arrears.
Spending an additional 3 – 5 minutes during each tenant induction, explaining the payment and receipting process for your agency, including any lag periods due to processing times and will set you off in a more promising direction. Demonstrate, showing an example of a tenant ledger with the payments and notices recorded (3rd party information removed), that should their rent become 1 day overdue an sms reminder will automatically be sent and recorded on their ledger by your software product.
I believe that it is your responsibility as a professional, to advise your new tenants (in a genuinely helpful way) of the negative effect that a ledger with arrears notices could have on any future finance applications they might make whether it be for a credit card, home or investment property purchase. You choose what seems most appropriate for each tenant, it could be a car, furniture or future rental applications.
To further emphasise the importance of this matter, get into great detail about aligning their payments with their pay day. Are they paid weekly fortnightly or monthly? Allow them to set up their automatic debit or payment system from your office, and while they’re on their device why not ask them to give you a Google review.