SMALL BALANCE WILL GROW TO THOUSANDS IF YOU LET IT!
Each month closely monitor all of your AR(accounts receivable) and even small unpaid rent payments or other charges. If renters are slacking or carrying small balances (i.e., unpaid late fees), they get a letter or legal notice. Keep working this list, each and every month. Terminate those that tend to keep popping up on the list. A little effort goes a long way, because usually there is no good that comes out of letting mediocre tenants rack up huge bills. Eventually they will move out after much frustration for both parties. Often they leave damages and lots of stuff inside the rental unit. Very few will attempt to make payments, even with a judgement. Small balances can grow to thousands before you realize it.A landlord on the MrLandlord.com facebook page responded by saying: “Why let renters get behind in the first place. Train them when they are new. Don’t wait for slow payers. Serve notice as quickly as your state allows.”
My response: Your line of thinking is the ideal business practice… The landlord advising here is addressing so many rental owners who unfortunately have not been as firm in their payment policies as you and have allowed residents to get a little behind, with the landlords thinking they are trying to help the renters and hoping they will eventually get caught up. As you have learned, the reality is that most do not.
The warning here to those landlords, is that the practice of allowing renters to gradually get a little behind (and to do so repeatedly) will most likely only lead to much BIGGER financial problems. So the advice is to get back to the ideal business practice and not allow slow pay by taking legal action NOW to either prompt renters to get completely caught up while the amount is small or evict them before the situation blows up on you!