Letting agents could be able to claim back thousands in unpaid rent for their landlord clients, simply by reviewing their rent collection procedures.
Automated rental platform PayProp made the statement, suggesting that manual reconciliation and reactive, ad hoc management of arrears could be costing agents and landlords vast sums in unpaid rent every year.
Research from the Residential Landlords Association indicates that 28% of landlords have experienced rent arrears during the last year. A separate study earlier this year from Your Move discovered that nearly 9% of tenants in England and Wales were in rent arrears.
PayProp has described the process of reconciling payments manually, still a process carried out by many agents, is: ‘labour intensive and open to human error.’
As a result, the firm is advising agents to review their rent collection procedures and to employ automation in order to remind tenants that their rent is due and if they miss a payment.
Neil Cobbold, Chief Operating Officer of PayProp in the UK, noted: ‘Sending letters to chase unpaid rent is an outdated and largely ineffective process. It’s easy for tenants to ignore letters and it’s also a waste of paper – particularly if this approach garners few results.’
Could reviewing rent collection process recoup thousands on unpaid rent?
In contrast, Mr Cobbold said that SMS reminders are the most efficient and successful method of chasing rent arrears.
Figures released from PayProp indicate that 61% of customers in arrears either settle or arrange payment within 48 hours of being reminded by SMS.
Concluding concludes: ‘When it comes to payments we’re of the viewpoint that many agents’ current method of collection and reconciliation is outdated and inefficient. We passionately believe that an automated rental payments process can save agents money and time, while also helping them to generate more revenue and grow their lettings book.’