Partnerships and Rent Collection
Partnerships in investment property is a fairly common practice. I was never one to want a partner initially, but after watching some successful investment property partnerships, I am convinced more than ever that there is at least one place they can be a huge benefit. This place is in rent collection.
I am often amazed at how far a landlord will let a tenant go on paying their rent. I even fall into this siren song occasionally: “if I evict them today, I will get nothing, but if I wait just one more week (like the tenant says they need), I might get paid”. While it rarely works out that you get paid, it always seems like the smoother path to wait another week that go to through the ugly process of filing and eviction. Most individual landlords make this mistake. Call it Minnesota nice or just the fear of confrontation, I have not met many individual landlords that are really as hardcore at rent collection as they need to be.
When watching several successful partnerships recently, I noticed that they seem to be much more business-like and unwavering at rent collection. It is due on the 5th, by the 6th they send letters and statements, by the 11th they are filing evictions. Maybe it is male ego or something, but it seems like one partner will not allow the other partner to deviate from the rental collection rules. I suspect that individually, they might make exceptions if they weren’t accountable to anyone else. Together the partners make a stronger team.
Rent collection is necessary part of being a landlord, but also one of the least enjoyed or maintained. This is how you get paid, this is how you pay your bills. If you don’t have a partner in the business, be accountable to your spouse to collect all the rent and in a timely manner.
I have not been one to partner on many investment properties. But I do have to agree with this post. Having someone else there to ensure you are treating the operation as a business, especially when it comes to rent collection really is crucial.
Property owners demand speedy and accurate rent collection. Perhaps no property management employee feels this demand more intensely than the assistant manager, whose job it traditionally has been to sort through the hundreds of rent checks that arrive at the beginning of each month and post them to the appropriate resident ledgers utilizing one of a variety of accounting software programs.