|
Why Being Soft On Collections Does Not Help
Anybody
Written by Frank Rolfe and Dave Reynolds,
MobileHomeParkStore.com, LLC
When I first got in the mobile home park business, I was
very inexperienced in collections. My natural instinct
was to be nice to my customers and never offensive. So
when I first encountered customers who would not pay
their rent, I did not want to offend them by filing
evictions. Instead I tried phoning them or sending
reminder letters. Time marched on. After they promised
to pay several times and still never did, I realized my
methods were not working and that I would need to
"toughen up" and change my ways - and I started filing
evictions as soon as I could once they had failed to pay
on time.
You know what I discovered? I discovered
that this was the best thing for all parties involved.
Here's why:
Some people need strong direction. Just
like kids in school, some people need a firmer hand.
Your filing of eviction may be the trigger that the
tenant needs every month to pay his rent.
Once
you let a tenant get more than one month behind, they
are doomed. I learned early on that most mobile home and
trailer park residents have great trouble saving money,
or showing a surplus from their paycheck. If you let
them get more than one month back (and one month is
pretty bad too) they will never be able to get caught
up. You are actually doing them a disservice if you let
them get behind. They can adjust their spending
priorities or borrow from relatives and get current if
you get tough early on. Think of your own mobile home
park mortgage. If you let yourself get three months
behind, could you get current overnight?
Being tough
on collections trains all of the tenants on the correct
spending priorities. Those priorities should be their
taxes, housing, auto payment, insurance, gasoline,
utilities, and then all the other fun stuff like cell
phone, beer, etc. Not to sound like there is some great
"bettering the world" angle here, but maybe their lives
will be better because you taught them this lesson.
It is not fair to the other tenants if their
neighbors don't pay rent but still get to live there for
free. Not only will everyone stop paying eventually when
the word gets around, but it is just not morally right.
Being tough on collections, believe it or not, is the
only fair way of dealing with the issue.
If the
tenants don't pay you and you can't pay your bills then
the park will shut down and nobody will have a place to
live, or they will have to spend $3,000 moving their
trailers to a new mobile home park.
Most everyone
flourishes in consistency. If the tenants know the rules
of how things operate, they are better at meeting the
rules and feeling secure. This is true in any enterprise
or relationship. If the tenant knows the rent is due on
the first, late on the 5th, and they get evicted on the
15th, then they know what to do. When you make payment
plans and are soft one month and tough the next,
everyone is confused and unhappy.
It is also
important to remember that a tenant who does not pay
their rent on time, but does ultimately pay their rent,
is your most profitable customer, assuming you have a
significant late fee. You should not become discouraged
if many people do not pay on time—you should be
enthused! Those late fees are straight profit.
So
don't be afraid to be tough on collections. You are
really just following the natural order and it will be a
win/win solution for everyone!
To learn the best
strategies for collecting rent in your mobile home park,
including the real-life insider secrets, tricks and
shortcuts, consult our Home Study Course available at
www.Mobilehomeparkstore.com, or call (800) 950-1364.
|
Digg |
Technorati |
Furl |
Blinklist |
Reddit
|
|
Share this on your favorite social
networking service! |
|
