This article was posted on Monday, Jan 01, 2018

How is a property affected by late rent? Unpaid rent obviously affects a property’s financial performance. It’s lost or at least delayed revenue. Expenses related to unpaid rent are filing fees, court costs and attorneys.  The impact on the property exceeds these financial costs. 

Legal Expense from Late Rent

The cost of late rent collection is not limited to the legal system and filing fees. The amount of time dedicated each month by the onsite team to collect late rent is a huge drain on a limited resource.


Proactive efforts to remind residents to pay rent and avoid late fees require time, whether its email, phone calls or posting notices. Follow up calls securing commitments for unpaid rent, again absorb time. Knocking on doors, posting notices, sending emails, or leaving voice mail messages for outstanding rent balances require hours of time each week. 

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Adding Up the Time

For every household that fails to pay rent by the due date, the leasing team will dedicate a minimum of 10 to 15 minutes per household encouraging, reminding and counselling residents on the importance of submitting their required rental payment. On a property with 200 apartment homes, if 80% of the residents pay on or before the first of the month, that leaves 20% for follow up…40 households. Preparing, and executing those calls with a 10 minute expectation; that’s 400 minutes, over six hours.

The extended collection process for slow and unpaid rent that lingers past the late fee deadline requires repeated calls, notices eventually copying documents for the attorney, or to simply file in court again, a continuing time commitment. 

Last Minute Collections

I worked with a property that struggled every month to meet the required objective of less than 2% unpaid rent at the end of the month. As late as two and three days before the end of the month, we would be tracking 7 and 8% unpaid rent. “Don’t worry” was the response, “we always get to the goal.” And they usually did, but to know every single day calls needed to be made, notices needed to be posted,  or having to knock on doors up to the very last day of the month – only to watch the calendar change to the next month and begin the entire process over again.

Imagine how the schedule and responsibility for the leasing team would be different if no one had to be scheduled for late rent follow-ups. The example showed the customer service reminder call could easily take four to six hours. As the number of unpaid rent decreases, with late payments straggling in, the difficulty of contacting and securing a commitment for payment increases requiring more …TIME. For the handful of residents that remain unpaid after mid- month, the time investment grows to an hour plus; repeated phone calls, possible travel to court and waiting for the legal hearing. 

I Wish I Had Time to…

It’s easy to add up the time required for each step of the late rent collection process. For all of the tasks that we struggle to find time for:

  • More resident appreciation functions
  • Outreach marketing
  • Preferred employer contacts
  • Attending Chamber of Commerce and Rotary meetings

Improving timely rent payments will result in decreasing the time needed to collect late rent. Reducing the time taken for late rent calls increases the time for “other things.” Finding ten hours a month is only the starting point. In a year’s time, those 120 hours has added 15 days worth of time to pursue activities that will improve your property.

How much time do you spend collecting unpaid rent each month? What would be something you could add to your property’s schedule if you could decrease the late rent collection activities?

[Editor’s Note:  Here are a few tips to use for getting your rent on time:

  • Serve a 3-Day Pay or Move Out the day after rent is due.  Don’t wait.
  • Always impose and collect late fees with a 3-Day Cure the Violation or Move Out in a timely fashion.
  • Thank and reward tenants who pay on time with a small gift at year-end; the word will get out to others.
  • Investigate easier ways for tenants to submit their rent – online payments or accepting credit cards.
  • If they mail their rent checks to you, send each tenant 12 self-addressed stamped envelopes at the beginning of the year.]


Lori Hammond has been in the property management business for over 30 years, after starting as a part time leasing consultant. She has worked with some tremendous industry leaders such as Oxford Management, NHP Management, AIMCO, Alliance Residential, Boston Capital, The Sterling Group, P.K. Housing and currently Management Resources Development.  For more information, visit her web site at  Reprinted with permission of Multifamily Insiders.