Fatal Financial Forecasting

SEA_3173-Edit-EditNot but a week ago I happened to read an article on the internet news about how so many millions of people get themselves in financial trouble. Two of the major culprits they spoke about were not really knowing what their hard monthly expenses are as well as creating long term debt without factoring in possible unexpected expenses that often arise in the future. Having been involved for a number of years in property management, I can freely say that far too many people live from paycheck to paycheck.

NSF checks were seen often and when the tenants were called, they seemed shocked that they didn’t have enough to cover the rent check that was written. Writing bad checks is a major no-no in the State of Iowa. Most people don’t realize that writing a bad check over a certain amount can be reported to the police and the bad check writer could likely be charged with 5th degree theft. Since most court records are visible on-line, that wouldn’t be a very good reference for someone applying for housing or even applying for a new job. I understand now why more and more businesses are refusing personal checks due to the number of bad checks written.

A client of mine who has rental properties mentioned that a tenant who happened to be short due to expenses had asked the landlord to wait for several weeks to deposit the rent check. She was more than generous by holding the check and several days later, she received a notice from her bank that the tenant’s check had not cleared. I suggested that she refuse personal checks from her tenant going forward in time as well as not to give so much leeway for a tenant that was nearing a habitual tardiness in rent payment. I do understand that people have financial problems at certain times, but when it appears that they are in a downward circle of not being able to pay for the simple basics of living, then it is time for the tenant and landlord to part company because too many times in the end, the landlord finds him or herself holding a larger financial “bag” than would have ever been expected after the tenant has finally moved out of the house or apartment. When the landlord mentioned that the tenant had recently purchased a nearly new vehicle, it was just another confirmation to me that too many people are into buying things now and worrying about paying for them later. I would say that is about as close as you can get to the definition of fatal financial forecasting.

Joe Chodur

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