A landlord can face a lot of things every day with this business. There are a lot of stuff to manage and not much time to do it. Some people think there is not much work if someone is a landlord. That is a wrong impression.
Landlords are expected to perform numerous tasks at the same time. The more properties they manage, the heavier the workload. You know what I mean. You surely have encountered landlords trying to juggle everything. Aside from the usual tasks, there are also problems that they have to deal with.
One example is when a tenant is unable to pay rent for several months that the landlord can feel the financial strain. Dealing with a tenant who refuses to pay will mean additional work for the landlords. Aside from sending reminders and threatening them with eviction, another thing a landlord can do to compel the tenants to pay their rent is reporting them to credit bureaus.
If the landlord reports the delinquent tenants to the credit bureaus, it will show up in their records. So when they plan on renting a different property, the new landlord is made aware that they have a history of missed payments. This would contribute to making credit checks easier for landlords and rental agents to conduct.
• Large Landlords
These landlords are those with high numbers of payment records. They can use the three major credit bureaus: Trans Union, Equifax, and Experian, to report their rental payments. Unfortunately, smaller landlords are not able to report to those three. But do not worry, there is something they can do.
• Smaller Landlords
For those smaller landlords with less than 500 units, they can use Experian’s RentBureau service. When landlords avail of this service, the rental payment is automatically deducted from the tenants’ bank accounts and transferred to them, which makes things easy, if you think about it.
They will also record all payments, missed or not. All payment histories will appear on the report if a landlord or leasing agent will conduct a credit check. But remember, the tenant has to agree with using this service.
• Collection Agencies
A landlord can also opt to hire a collection agency to obtain the rental payment for them. This will help them avoid wasting time trying to chase down a tenant who refuses to pay.
Some collection agencies can file reports on behalf of the landlord, so he should choose which one offers this service. A tenant will presumably pay the rent owed if they know that it will affect their credit score.
• Taking matters into court
If the tenant is still not bothered by collection agencies or reports to the credit bureaus, the landlord can choose to file a case against him. This will also reflect on his credit reports, which will warn future landlords about the tenant’s tendency to miss payments. Remind the landlord to keep documents about the tenant’s payments, or lack thereof, as proof.
If a landlord is going to push through with reporting a tenant to the credit bureaus, he should do it regularly.
When you publish your rental listing on Padleads and potential tenants start to reach out to you, you can already let them know about how regularly the landlord reports the late payment to credit bureaus. This will motivate the renters to pay on time and to maintain a clean record. This will also discourage intentionally delinquent tenants from applying.