Last modified on January 24th, 2018
By Elizabeth Millar
It has been said that clever people solve problems while wise people avoid them. In property management, there are many things that are out of your control. Tenants can make poor decisions, accidents can happen, and sometimes revenue is lost. While it’s impossible to avoid all of the risks in the property management business, you can do many things to manage your risk and set yourself up for success if you do need to recover debt.
Risky Business: Manage Risk and Improve Debt Recovery
In a recent webinar, AppFolio risk mitigation experts, Laurie Lowe and Kirsten Rowland, share their best practices to manage risk and improve debt recovery in the property management industry.
Find out how to utilize best practices in the following areas so that you can be ready for anything if or when problems arise:
- Tenant Screening – Do you have a tenant screening process in place? Do you strictly follow it every single time a renter applies to one of your properties? Learn tips and tricks to ensure that you’re always matching the best renter to your property—and staying compliant.
- Data Collection and Management – Are you still collecting information on paper? You’re going to want to hear how to collect data, which data is critical to get from your renters, and how to secure it while making it accessible to your team.
- Protecting Your Properties – Do you require proof of renter’s insurance? After listening to this webinar, you may want to once you hear what it covers and how it goes far beyond covering the renters’ belongings.
- Debt Recovery – How much time to you spend recovering debt? It can be a huge time sink, but you can make the most of your time by applying strategies to your collection process and improve your overall recovery.
Check out Laurie and Kirsten’s presentation recording below for wisdom on avoiding risk and improving your debt recovery efforts:
What is your source of the recovery rates for bad debt mentioned on slide 27 mentioned at minute 27?
I spoke with our webinar presenter, and the stat is based on 3-year liquidations from a nationally-licensed collections agency specialized in residential/multi-family debt.
She was able to provide greater detail on the recovery rates mentioned. Around $3,000, liquidations begin to drop below 10%. Average liquidation flattens out between 2 – 5% for balances over $4,500.
Industry-wide statistical models show that account balances between $500 and $1500 are far more collectible than those greater than these amounts.
As a general rule, staying under three times the rent amount is usually a good bar for improving your chances of recovery!