While falling into arrears can be burdensome for agencies, it is possible to keep arrears below 1% with a few key strategies.

Keep arrears under 1% with these key strategies:

  • Select tenants carefully and use the 70/30 rule
  • Thoroughly educate tenants about late payment consequences
  • Communicate rental arrears policy from the start
  • Use high-impact letters for serial offenders
  • Set up direct debit rent payments
  • Be practical with payment plans
  • Systemise your arrears handling process
  • Consider positive reinforcement for on-time payments.

Implement strict tenant selection

Say goodbye to arrears! Tighten tenant selection and use the 70/30 rule to keep rent below 1% with automatic debit payments.

A thorough tenant induction

Warn tenants upfront about the consequences of late payments. Late payments are noted on their rental ledger and may affect their ability to rent in the future or get listed with a tenancy database.

Early intervention technique

Catch arrears before they pile up! Communicate your rental arrears policy early to avoid surprises when warnings are issued.

Minimal to no use of standard reminder letters

Avoid standard reminder letters – tenants often ignore them. Instead, maintain constant contact through SMS, phone calls, or even a property visit in serious cases.

Use high-impact letters for those serial offenders

Get tough on serial offenders by sending high-impact letters that show you care but won’t tolerate late rent. Avoid simple reminders and go for a message that gets the point across. Serial offenders already know when rent is due, so make it clear that paying on time is a top priority.

Use an efficient payment method

Make rent payments efficient with direct debit. No more monitoring bank accounts or relying on tenants to schedule their own transfers. Set up automatic rent payments and ensure your rent is paid on time every time.

No personal payment plans in the termination zone

No payment plans when termination is near! Although using repayment plans is a good way to minimise the loss of rent and show effort to a tribunal, it’s important to be practical and reasonable. Don’t offer personal payment plans if the termination is imminent.

Systemise your process with other staff

Ensure your team knows the policy and procedure for handling rent arrears. Establish a clear plan that includes sending daily SMS reminders from the first day of arrears, followed by letters and phone calls if rent remains unpaid.

Consider positive reinforcement

If your tenant consistently pays rent on time, consider positive reinforcement. This could be as simple as a six or 12-month ‘paid on time’ certificate.

What strategies have worked best for your team? We’d love to know what you’ve had the most success with within your department. Let us know what you think in the Comments.


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