Christmas should be a fun time, and it is no fun suffering the stress and worry that comes with mounting arrears over the holiday season.
For tenants, there can be serious pressure to buy gifts and entertain friends and family over Christmas, and it is an unfortunate reality that some households choose not to pay their rent so they can prioritise other spending. Research from Shelter UK shows that one in 12 tenants are prepared to forgo their rent payments over Christmas. There is a significant risk that your arrears figures could grow.
Everyone takes a different approach to arrears. Some take a hard, zero-tolerance line, others take proactive steps to help ensure their tenants get their rent paid to avoid eviction. Either way, at the end of the day, if we can avoid eviction it is better for all parties involved. Whilst the majority of your portfolio may be good rent-payers, this is the time that some will slip, and a repeat offender will likely re-offend.
Options to combat arrears to minimise our stress include:
- Running a marketing campaign in the build-up to Christmas that aims to deter tenants from falling behind – to see examples of Christmas arrears marketing campaigns, click here
- Offer a financial support and advice service through assistance with budgeting plans. Some companies provide a flyer with budgeting advice, others go so far as to offer a financial planning helpline to call.
- Implement rewards/incentives to ensure all payments are on time, e.g. running a competition for all who keep their rent up-to-date or offering movie tickets for all who are two weeks in advance over the period.
- Provide special personal warnings to repeat offenders, to let them know you’re going to be watching their arrears very closely over the period to make sure they pay on time.
- Offer tenants an option to pay extra throughout the year to help them get a bit ahead for these tighter times.
- Remind tenants of the importance of maintaining a positive ledger. Instead of threatening termination, let them know you want to help them maintain a positive rental ledger to assist with future rentals (and even mortgage repayments, as these days, some lenders are requesting this information).
- Utilise your blog, newsletters and social media to educate and share the message.
Be sure to choose what works for your agency and your brand. Don't forget to score some brownie points with the owners and let them know what you're doing to ensure they don't have missing payments over Christmas.
What other ideas do you have for keeping your arrears low at Christmas? Please share them below!
For our Real Plus members, be sure to check out our Christmas Letter template on your portal, and stay tuned for more Christmas tips in your daily property management hints.