In Practice
Delinquency rate is one of the first numbers an owner checks. It tells you how much of the rent and charges billed are past due and still unpaid. It is usually reported on the weekly or monthly delinquency report, broken down by how late the balance is and by unit.
Day to day, delinquency work is steady and a little unglamorous. You post rent, send reminders, call residents, set up payment plans where policy allows, and move to the formal steps in your lease and local law when needed. The sooner you reach a resident, the more likely the balance gets paid. Balances that sit for months tend to turn into evictions or bad debt.
An example: if a community bills 400,000 dollars in a month and 12,000 dollars is still unpaid at month end, the delinquency rate is 3 percent.
A common mistake is waiting until the report looks bad before acting. Another is treating every late resident the same. Some need a reminder, some a payment arrangement, some a formal notice. Notice periods, late fee limits and eviction steps vary by state and city, so check local law and your company policy. This is not legal advice.
How to calculate it
Delinquency rate = unpaid rent and charges past due divided by total rent and charges billed for the period. Example only: 12,000 dollars unpaid divided by 400,000 dollars billed is 3 percent.
Not to Be Confused With
Delinquency is owed money that is still collectible. Bad debt is what is left after the property gives up and writes it off.
Delinquency: Common Questions
What is a good delinquency rate?
Lower is better, and many managers aim to keep it small. What counts as good depends on your market, your resident profile and your owner's targets.
What is the difference between delinquency and bad debt?
Delinquency is unpaid money you still expect to collect. Bad debt is money you have written off as uncollectible.
