The Trainer

Avoiding Move-in Inspection Mistakes; Choosing a Collection Agency

In this month's feature, we explained how to avoid common move-in inspection mistakes. Without an accurately conducted inspection and a completed report to substantiate it, you'll have nothing to rely on if there's ever a dispute about the condition of the unit at the time of move-in. Furthermore, if there are damages later on, it could be your word against that of a resident, unless you have a solid inspection report that shows that the unit was in good condition when the resident first moved in.

In another article, we discussed what you need to know about choosing and working with a collection agency. Of course, you're entitled to pursue residents who skip out without paying their rent. However, as we noted, while HUD could reimburse you for your past-due debt, you need to demonstrate to HUD that you have taken “all efforts to collect the debt” before HUD will pay. That's why it's so important to take great care in choosing your collection agency and to know how to work with the agency to achieve optimal results. Remember, a good collection agency will make it easier for you to collect debt. So make sure that the agency is experienced, reputable, and professional.

TRAINER'S QUIZ

INSTRUCTIONS: Each of the questions below has only one correct answer. On a separate sheet of paper, write down the number of each question, followed by the answer you have chosen—for example, (1) b, (2) a, and so on. The correct answers (with explanations) follow the quiz. Good luck!

QUESTION #1

In general, the most common mistakes managers make with move-in inspections include:

1. Doing the inspection after the lease is signed.

2. Inspecting without a household member present.

3. Failing to get the inspection report signed by the head of the household.

4. All of the above.

QUESTION #2

It is contrary to HUD rules to inspect the unit after a resident signs the lease. True or false?

1. True.

2. False.

QUESTION #3

Never conduct a move-in inspection without:

1. A third-party witness.

2. A police officer.

3. A member of the household, preferably the head of the household.

QUESTION #4

Your inspection report should indicate that, by signing the report, the household member agrees with the contents of the report. True or false?

1. True.

2. False.

QUESTION #5

When you are looking for a top-notch collection agency, you should find out:

1. Its rate of return.

2. How quickly it can return bad debt.

3. What percentage it holds on to.

4. All of the above.

QUESTION #6

If a collection agency is a member of the American Collectors Association, it means that it has agreed to comply will all applicable federal and state laws and regulations. True or false?

1. True.

2. False.

QUESTION #7

When choosing a collection agency, ask for a list of references with phone numbers so you can:

1. Promote your site.

2. Randomly pick and call past clients of the agency.

3. Report the agency to the Better Business Bureau if there are negative comments.

QUESTION #8

In general, the average recovery rate for a collection agency in the area of rental property is between:

1. 10 and 20 percent.

2. 20 and 30 percent.

3. 30 and 40 percent.