Delinquency Carry Cost Calculator

Unpaid rent accrues carry cost every month through resolution.

Unpaid balance

Months delinquent

Cost of capital %

Collections + legal cost

Total carry cost

$2,295

Opportunity cost

$95

Total exposure

$6,095

How the math works

Opportunity cost = balance × (rate/12) × months. Total carry = opportunity + legal.

$3,800 × (10%/12) × 3 = $95 opportunity + $2,200 legal = $2,295 carry. $6,095 total exposure.

How to Use

Enter unpaid rent balance.
Enter months delinquent.
Enter cost of capital %.
Enter collections / legal cost.
Read total carry cost.

Frequently Asked Questions

Why does delinquency have a carry cost?

Unpaid rent is effectively a zero-interest loan to the tenant. Your cost of capital (the return you could earn elsewhere — typically 7-12%) applies to that balance every month it sits unpaid. Plus you incur direct collections cost: posted notices ($25-75 per), attorney fees ($500-3,500 per case), filing fees ($100-450), process-service ($75-200). Institutional operators track 'carry cost per delinquent dollar' as a KPI alongside aging buckets.

When does carry cost exceed recovery?

When the math breaks, abandon and write off. Example: $3,200 unpaid balance × 18% annual carry + $2,500 legal + likely 40% collection rate = $1,880 all-in cost for $1,280 expected recovery = net $600 loss. Operators run this math at 60 and 90 days delinquent and often write off balances below $2,000-3,000 rather than paying legal fees. Smaller balances: ACH rejection → notice → cure or abandon.

What reduces carry cost?

Faster resolution: automated cure timelines (day 3 late notice, day 10 pay-or-quit, day 30 file), payment plans that cure rather than hold (ongoing rent + arrears in 6-12 months), quick-to-move-out incentives ($500-1500 cash for keys instead of eviction), and prompt write-off decisions on uncollectible. Speed is the enemy of carry — each month doubles direct + opportunity cost.

How do institutional operators handle this?

Monthly aging reports, automated escalation on day 3/10/30/60, in-house collections team or third-party (Hunter Warfield, RentPayment Collections), eviction filings on day 30+ in permissive states, alternative dispute resolution in tenant-friendly states, digital payment + portal to prevent disputes over receipt. Benchmark portfolio delinquency against NMHC survey data — median stabilized portfolio runs 1.5-3% of billed rent.