Property management is a demanding business. Often an administrator, a property manager, manages the common affairs of multiple unit complexes and is a key figure in keeping the common areas of the complex in good standing on behalf of the homeowners association.
The property manager is also responsible for collecting the monthly maintenance fees from the homeowners.
The majority of the property managers I speak to all over Latin America and the Caribbean have delinquent accounts in their portfolio. This reaches from a single bad payer to entire unit blocks that irregularly pay or do not pay at all.
In most of Latin America and the Caribbean it is unusual that the collection of maintenance fees is outsourced to an account receivables management provider or later on to a debt collection agency.
In the major cities and the tourist areas there is however an opportunity to improve the financial health of the homeowners associations and a business opportunity for accounts receivables management providers and debt collection agencies to fill the gap.
Reasons for property managers to outsource collections of maintenance fees to professional account receivables management providers and debt collection agencies are the following.
- It will result in increase of cash flow and more funds for the association to improve the quality of common areas and to invest in common affairs;
- It means less time spent for the property manager on collections and more time spent on property management;
- For debt collection, if your debt collection agency works on a contingency basis and charges and effectively collects interest and collection fees, your costs of involving a third party debt collection agency may be minimal;
- Giving the collections out of hands to a third party can improve the property manager’s relationship with the homeowners, as he is not the “bad guy” anymore chasing homeowners for money, but rather the outsource party is;
- It adds professionalism to the homeowners association’s financial housekeeping and improves collection processes;
- It will prevent more people from falling into bad payment behavior, as it is a clear regulative message towards all paying homeowners that the collection process is properly taken care of, and towards the bad payers that irregular or non-payment of maintenance fees is not tolerated.
There is an opportunity to improve the collection processes of homeowners associations all over Latin America and the Caribbean by outsourcing collections to professional account receivables management providers and debt collection agencies.
The reasons to engage professional account receivables management providers and debt collection agencies in the collection of property maintenance fees are: increase in cash flow, more time available to spent on property management, costs of outsourcing may be limited, it improves the property manager’s relationship with the homeowners, it adds professionalism to the collection process, and it prevents more homeowners from falling into bad payment behavior.
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