Over $11,000 in missing rent… Is there any hope?

[Brian Barbarow]

Greetings BP community! Newbie investor here, learning some lessons the hard way. I have over $11,000 in missing rent/late fees from a total of 5 tenants. Luckily they have all vacated the property, I am currently cleaning up their messes and making repairs to the property, but they are now obviously refusing to pay and just not replying to calls, texts and emails. I was using RentRedi to collect rent. I was quoted by a lawyer around $3,200 to pursue them in small claims court, but that’s also assuming I can figure out where they currently work (good chance they have bounced around jobs and would be hard to find) because they need to be “served” in person. 

I am posting here for anyone’s advice moving forward. I understand realistically I wont get all the missing money, but maybe and small portion from selling the debt to collections? Any words of wisdom is appreciated!

Thank you in advance!

[Melanie Thomas]

Hi Brian,

I can definitely empathize with your sentiment. Having been in the property management business for a considerable amount of time, it's disheartening to witness the staggering amount of unpaid rent/fees by tenants. To tackle this issue, we've established a partnership with a third-party collection company. While they do charge a small fee based on the amount collected, they have proven to be effective in arranging payment plans and facilitating settlements.

Unfortunately, unpaid rent often remains unresolved for extended periods, but we've found that many tenants eventually realize the need or desire to repair their credit in order to purchase a home or secure a new rental property. At that point, they often reach out to us to discuss payment arrangements and find a resolution.

Dealing with unpaid rent is an inevitable part of property management. The key is to find reliable partners who can report the delinquencies on the tenants' credit records and assist in the collection process. It's a time-consuming and labor-intensive task that I personally prefer to outsource to dedicated professionals. Good luck & happy investing!