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    How many of you are sending people to collections for unpaid rent? I have had a few abandoned units that bring almost nothing at auction or I have the expense of cleaning them out. For example, I have one now that owes $300. He just informed me he will not be coming back and I can have whats in the unit. He said, "its just junk, you can have it or throw it away."

    Would you bother with turning these over to collections?

    I am looking forward to any input or advice.

  • #2
    We don't turn them in here but that is the owner decision, not mine. I would turn them in. Part of the storage business is dealing with tenants like this. I screen all tenants pretty hard because I don't want to deal with things like this. It has now been over 3 years since my last auction. Something tells me I should and will stick to my screening process.
    "Never let the inmates run the asylum!"

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    • #3
      The previous owner here did not send people to collections. He would write it off as a loss come tax time. The new owner does send people to collections. I couldn't tell you which one is more worth while. The collection agency is going to take their cut. It could be a while if at all before the person pays up.

      Whether you use collection agencies or not, you can tell each customer that the debt will go to collections and will show up on their credit report until it's paid.

      I would call him and make him an offer. Say he pays $200 (maybe be willing to accept $150) if he shows up with cash asap and removes everything from the unit and the debt is cleared. The alternative is the unit sits a while, eventually goes to auction, rent and fees rack up to several hundred dollars depending on the size of the unit, the debt goes to collections and then he's got people from India calling him all day everyday looking for a lot more that $200. You would be offering him a helluva deal.
      A lack of planning on your part does not constitute an emergency on mine.

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      • #4
        We send everyone who goes to auction and still owes after, to collections. However-I don't know what percentage of success we get since the mgt company handles the other end of it. Must be enough to continue to do it.
        Even duct-tape can't fix stupid. But it can muffle the noises.

        WA State

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        • #5
          In a New York Minute. They will also have the clean up charge and a collection fee added before it is sent. I make sure they are aware buy sending a balance after vacate letter. All fees and total balance are in that letter. I hand write that they may deduct the collection fee if paid within 10 days.
          Joe Krezdorn
          DAK Self Storage
          Leesport, PA 19533
          www.dakselfstorage.com

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          • #6
            Originally posted by kentuckyandy View Post
            How many of you are sending people to collections for unpaid rent? I have had a few abandoned units that bring almost nothing at auction or I have the expense of cleaning them out. For example, I have one now that owes $300. He just informed me he will not be coming back and I can have whats in the unit. He said, "its just junk, you can have it or throw it away."

            Would you bother with turning these over to collections?

            I am looking forward to any input or advice.
            I am curious how you handle your auctions?
            Live on-site?
            OR
            Do you post on-line for a lien sale?

            Don't put off until tomorrow, what you can do today.

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            • #7
              Originally posted by kentuckyandy View Post
              How many of you are sending people to collections for unpaid rent? I have had a few abandoned units that bring almost nothing at auction or I have the expense of cleaning them out. For example, I have one now that owes $300. He just informed me he will not be coming back and I can have whats in the unit. He said, "its just junk, you can have it or throw it away."

              Would you bother with turning these over to collections?

              I am looking forward to any input or advice.
              Yes, we do send most to collections. If it's $100 and 5 minutes of my time to throw away their trash, probably not. It will be quicker to spend the time to clean the unit and re-rent it.

              We have had a couple tenants "vacate" their unit but leave their lock on so we have no way of knowing it was empty until we cut the lock (usually when the auction comes up). We can cut the lock sooner, but usually wait until auction. In both instances, we had no idea the unit was empty. We sent letters and emails with no response. When it was auction time and we cut the lock to an empty unit, we then sent to collections. In both cases, the tenant called us screaming and threatening with a lawsuit. The collections company then took them to court and both times we won. We get 50% of the amount owes, the collections company took 50%. They also add on fees to the person they are collecting from. The last one told us it was $1500, but I find that hard to believe. Each amount past due was around $400, but we added as many fees on to it as we could before sending to collections. Our lease states that we can charge the tenant the collections fees we are charged, but it depends on which state they live in. Some states don't allow that so that's why we add on all the bs fees we can (according to our lease) before sending to collections.

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              • #8
                Originally posted by letsgosonics View Post

                Yes, we do send most to collections. If it's $100 and 5 minutes of my time to throw away their trash, probably not. It will be quicker to spend the time to clean the unit and re-rent it.

                We have had a couple tenants "vacate" their unit but leave their lock on so we have no way of knowing it was empty until we cut the lock (usually when the auction comes up). We can cut the lock sooner, but usually wait until auction. In both instances, we had no idea the unit was empty. We sent letters and emails with no response. When it was auction time and we cut the lock to an empty unit, we then sent to collections. In both cases, the tenant called us screaming and threatening with a lawsuit. The collections company then took them to court and both times we won. We get 50% of the amount owes, the collections company took 50%. They also add on fees to the person they are collecting from. The last one told us it was $1500, but I find that hard to believe. Each amount past due was around $400, but we added as many fees on to it as we could before sending to collections. Our lease states that we can charge the tenant the collections fees we are charged, but it depends on which state they live in. Some states don't allow that so that's why we add on all the bs fees we can (according to our lease) before sending to collections.
                Is it worth doing ? I mean do they collect a good percentage of what you send to them?
                Dave (Woodee) Scott

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                • #9
                  Yes it is worth sending them, no the percentage is not great IF you don't keep updated contact info. If you can somehow get their place of employment, you have a very good chance at collecting in full.

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