In uncertain economic times, dealing with arrears and bad debt becomes more pressing for rental agents. Tenants are experiencing increasing financial pressure, rental debt can be a burden, and when things go wrong, meeting debt repayments can further reduce their ability to pay the rent. Rental agencies don’t just see their bottom lines suffer – they can also find themselves spending so much time chasing late payments that their core focus is left behind.
Dealing with all this can be frustrating if you don’t have the right tools, but with proven PropTech in place it can become just another automated admin task. PayProp not only comes with solutions for managing bad debt and arrears, it also provides powerful tools for preventing them in the first place.
Here is how PayProp helps rental agents to stay on top of arrears:
Tenant Assessment Report
There are many pieces of evidence that rental agents can check when matching a tenant with a property, from bank statements and salary slips to following up with references – but the most comprehensive is exclusive to PayProp. While a traditional credit check only covers an applicant’s indebtedness and repayment history, the Tenant Assessment Report combines rental payment history together with information pertaining to secured and unsecured lending for a more holistic view of risk.
Tenant payment profile
Where does the rental payment data used in the Tenant Assessment Report come from? All PayProp clients can submit tenant payment behaviour directly to our credit bureau partner, Experian. The process is simple and completely within the agent’s control. Easily share dates of payment, previous amounts paid, deposit balances, outstanding rental balances relative to previous invoices, payment reminders and Letters of Demand issued, and more. This tenant data is used to calculate the Tenant Risk Scores provided through PayProp’s Tenant Assessment Report, helping agents and landlords to vet applicants more thoroughly.
Letters of Demand
A Letter of Demand not only puts pressure on a party to remedy a situation early on, it also demonstrates your intention to resolve a matter amicably and without court or tribunal involvement. PayProp offers a fully integrated Letter of Demand (LOD) service in partnership with Koegelenberg Attorneys. In one click of a button, Letters of Demand can be issued to every tenant in arrears on your books. An e-mail with the letter is sent to the tenant, as well as a signed physical letter sent via registered mail. The tenant is automatically billed for the cost of the letter. Once the LOD is issued, the system automatically calculates the payment deadline and keeps you informed when it elapses.
Practical tips to avoid escalated arrears:
- Check past rental payment behaviour when vetting applicants
- Invoice on time, every time using an automated invoicing system
- Actively chase outstanding monies using PayProp’s automated e-mail and SMS payment reminders and Letters of Demand
- Maintain continuous communication with tenants
“I call the system on PayProp the Ferrari of arrears management, it navigates you through all the issues to be able to service the landlord effectively and proactively.”
Brenda Lange, Director, Leapfrog Property Group – Kempton Park & Benoni