Bill Gray – The Landlord Doctor

Insider Advice on Collecting Tenant Debt and Screening Tenants

Archive for the ‘Credit Bureau Reporting’ Category

Accurate Tenant Screening may Become Much Easier!

Posted by Bill Gray on July 20, 2010

A credit report is basically a report card of how a particular person pays their bills. Why are monthly rent payments not reflected as a trade line on the credit report? I as well as many [tweetmeme source=”your_twitter_name” only_single=false http://www.URL.com%5Dothers, have felt for years that rent payments should be included on the credit report, just as mortgage payments are. If a tenant pays the rent on time every month, they should be awarded credit for paying their obligations. On the other hand, a tenant who does not pay their rent, or pays late, should be dinged on their credit, as they are if they pay a credit card late or skip the payment.

This month Experian announced that it has acquired RentBureau of Atlanta, Georgia.  This acquisition may finally make it possible for rent payments to be accurately reflected on the credit report. RentBureau is the nation’s largest consumer-reporting agency specific to the multi-family industry. RentBureau provides landlords and property managers a way to report rent payment history.  Click here for the press release

I have not learned the details of what Experian’s plans are with this acquisition, but I assume the result will be that landlords will finally have the ability to report rent payments directly to Experian, just as a mortgage company reports payments.

This could be a huge leap forward for both landlords and tenants. By reviewing a prospect’s trade line reflecting rent payments, a landlord will immediately know if the prospect has paid his/her rent on time. Conversely, tenants will finally receive credit for timely rent payments.  Using this information to screen tenants could greatly decrease the possibility of a tenant skipping or being evicted because the rent was not paid.

I am curious how my reader feel about this new development in screening tenants. Please take two minutes and complete the quick survey. Include your email address and I will send you my free E-Book “How to Detect Social Security Number Fraud.”

Click here to complete the short survey

Bill Gray

Bill@thelandlorddoctor.com

www.thelandlorddoctor.com

Tenant Debt & Screening Forum www.theinformedlandlord.com

Copyright 2010 – Click here to reprint/re-post

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Posted in Credit Bureau Reporting, Credit Report, Evicted, Landlord, Property Management, Tenant Screening | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , | Leave a Comment »

Tough Economy Makes Tenant Debt Tough, but Not Impossible, to Collect

Posted by Bill Gray on December 28, 2009

[tweetmeme source=”your_twitter_name” only_single=false http://www.URL.com%5DThe downturn in the economy has caused many landlords to lower their credit requirements for new tenants.  Of course, lowering credit requirements increases financial risk. Renting to a tenant with little or poor credit increases the likelihood that the tenant will at some point leave owing the landlord money.

This change in rental criteria is understandable, considering the need to keep all units rented.  But know that when you lower your standards and in turn incur debt, this debt will be tougher to collect than if you had rented to a tenant with good or great credit.  If you use a collection agency to collect the debt, you should also lower your expectations about how much you feel they should collect.

Collection agencies are reporting that they are receiving many more files than two years ago.  The average amount of debt in these files has also increased.  Relaxed rental standards, coupled with the high unemployment rate, have put collection agencies in a tough spot.

The American Collectors Association reports that the collection industry debt recovery rate is down 30-40% over last year.  Angi Pusateri, National Sales Manager for RentDebt Automated Collections, confirmed that her company is experiencing a similar decline in debt recovery.  However, RentDebt Automated is weathering the storm well and has added employees in the last year at their offices, which are located in Nashville, Tennessee and Dallas, Texas.

Jeff Cronrod, the President of Rent Recovery Service, a national collection agency specializing in the collection of tenant debt, estimates that nearly 40% of the debtors his company is trying to collect from are unemployed.  “It is not that these debtors do not care about the debt or their credit. They simply have no means to pay the bill,” Cronrod explained.

Saul Wertzer, President of Rent Recover Solutions in Atlanta, Georgia (not to be confused with Cronrod’s Rent Recovery Service), told me that his company has also seen an increase, not only in the number of collection files, but also an increase in the average amount of each file.  I have heard this from every company I have spoken with, in every corner of the country.  Wertzer went on to say that it is important for landlords and property managers to think long-term about debt they are owed by previous tenants.  Over time a good percentage of tenant debt is collectible.

If your collection agency has served you well in the past, stick with them, even though recent recoveries may have dropped.  Trust me, every agency is experiencing a tough time collecting debt.  Don’t jump ship and hire another agency, because eventually the economy will improve and many of these tenants who owe previous landlords will get back on their feet.  When they do, they will work to clean up their credit and pay their debt. But don’t wait until then to do something about it.  Now is the time to make sure the debt you are owed is reported to all three major credit bureaus. Whether your collection agency reports the debt or you report it via an automated service, make sure every dollar you are owed is reported.

Doing so will greatly increase the odds that you will get paid the debt your previous tenant owes you.

Email me your tenant screening and tenant debt questions.

Bill Gray

www.thelandlorddoctor.com

www.theinformedlandlord.com

Copyright 2009 Click here to reprint/re-post

Tenant Debt & Screening Forum www.theinformedlandlord.com

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Posted in Collection Agencies, Credit Bureau Reporting, Landlord, Landlord Tenant, Landlord Tenant Law, Property Management, Tenant Debt Collections | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment »

New Landlord Forum – Tenant Debt and Tenant Screening

Posted by Bill Gray on November 25, 2009

[tweetmeme source=”your_twitter_name” only_single=false http://www.URL.com%5DThanks for reading my blog.  I try hard to respond to every email I receive, but I receive more and more every week.  It is getting hard to keep up.  I started a forum that will address tenant debt and tenant screening issues to help answer the commonly asked questions.  Please help me get the forum off the ground by registering and posting your questions.

The forum url is: www.theinformedlandlord.com

Thanks,

Bill Gray

Bill@thelandlorddoctor.com

www.thelandlordoctor.com

Copyright 2009

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Posted in Credit Bureau Reporting, Evicted, Landlord, Landlord Tenant, Landlord Tenant Law, Property Management, Tenant Debt Collections | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 2 Comments »

Don’t Miss an Important Component to Screening New Tenants!

Posted by Bill Gray on October 7, 2009

[tweetmeme source=”your_twitter_name” only_single=false http://www.URL.com%5DA vital part of tenant screening requires more than learning about applicants, their employment and credit history—it’s learning everything you can about theirtele-interview2 previous rental history. Yes, former landlords who have rented to this tenant before have a wealth of information which should be weighed carefully before you approve an application.

Think about it. For six months or six years, former landlords have received or not received payments from your applicant. They know how the tenant left the property and about any complaints made when they leased it.  Their file and recollection can provide you with more insight than you’ll find by calling employers or ordering a credit report.

Start with the end in mind and weed out any applicants who might not treat your property with a gentle, kind, and caring hand. Was their former landlord impressed with the condition and cleanliness of the property when the tenant moved out?  Or were they overwhelmed and disappointed with the lack of attention and personal consideration they showed by leaving the unit a mess?

Screening former landlords can reveal much more, though, and the information you gain is worthy of your time. Does the tenant have a history of short-term housing, indicating problems with payment or other terms of the lease? Was the tenant a nuisance to other tenants? Did the tenant honestly disclose past information to previous landlords, and did that information hold true?

I should note here that all applicants are not Honest Abe.  Dishonest applicants know that telling the truth on applications could hurt their chances of being

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Posted in Credit Bureau Reporting, Landlord Tenant, Tenant Screening | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , | 7 Comments »

SUING AN EX-TENANT FOR PAST DUE RENT: What Factors To Consider

Posted by Bill Gray on September 14, 2009

[tweetmeme source=”your_twitter_name” only_single=false http://www.URL.com%5DTristan R. Pettit, Attorney at Law, Milwaukee WI –       Tristan’s Landlord – Tenant Law Blog www.petriestocking.com/blog/

Your tenant has already vacated your rental unit – so there is no need to file an eviction action — but they left owing you money.  Is it worth your time and effort to sue them in order to obtain a money judgment?  This is probably the third most frequently asked question that I receive when talking to landlords (the first two most asked questions in case you are curious are (1) which notice do I use when? and (2) how do I evict my tenant?).

There is not a simple answer to this question.  It depends . . . on many things.  Many variables need to be taken into consideration before deciding to spend the time and effort to sue an ex-tenant.  Let’s consider what some of those variables are.

1.     How much money does the tenant owe you?

Is the amount that is owed to you worth the time, energy, and cost to attempt to collect it?  You will need to purchase a small claims summons which will cost you approximately $100.  You will need to personally serve the ex-tenant with the assistance of the Sheriff or a private process server — typical cost between $35-$100.  If you are representing yourself you will spend time away from work and therefore lose some wages.  If you opt to hire a lawyer to represent you, you need to consider how much you will have to pay the lawyer.

There is no magic dollar amount that makes suing a tenant worth it or not worth it.  The “breaking point” as I like to call it, will be different for different people. Read the rest of this entry »

Posted in Credit Bureau Reporting, Evicted, Landlord Tenant, Landlord Tenant Law, Tenant Debt Collections | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 3 Comments »

Landlord Tenant Lease – Is Yours Legal?

Posted by Bill Gray on September 10, 2009

[tweetmeme source=”your_twitter_name” only_single=false http://www.URL.com%5DWhether your lease is actually legal is a loaded question.  What is legal?  Legal is whatever will hold up in a court of law on any given day, in front of any givenFlexLease judge.  Is there such a thing as an iron-clad lease?  I don’t think so.  Widely-used lease texts and formats may be utilized by many landlords and property managers for years, only to be determined by a judge down the road that these have been used in error.

I sometimes hear from landlords, “If it is in my lease and my tenant signed it, then it must be legal.”  Sadly, this is far from the truth. Just because your tenant agreed to whatever terms you put in your lease, does not make it a legal contract (lease) that will withstand judicial scrutiny.  Any contract is open to dispute; just take a look at the backlog of civil suits.  Disagreements over contracts happen every day, all over the country.

“Okay, Bill, now that you have suggested I may be using a lease that will not hold up to judicial scrutiny, what do you suggest I do?”  The best anyone can do in composing any type of legal contract is to write one that has the best “chance” of holding up in court: it is all about minimizing risk.

My advice to you is to hire the best landlord-tenant attorney in your area and have him/her review your lease periodically.  Laws and case law change often.  State

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Posted in Credit Bureau Reporting, Landlord Tenant, Landlord Tenant Law, Tenant Debt Collections | Tagged: , , , , , , , , , , , , , , | 1 Comment »

I’ve been having all kinds of trouble collecting the rent from my current tenants

Posted by Bill Gray on September 9, 2009

[tweetmeme source=”your_twitter_name” only_single=false http://www.URL.com%5D

“Hi Bill,  I own a house in North Texas and I’ve been having all kinds of trouble collecting the rent from my current tenants.  They skipped 2 months of rent  back in May & June and started paying again in July & Aug but then, now they don’t have money to pay for this month(September), I am getting ready to file Eviction on them.

Do you have any advice for me with this kind of situation?  Thanks for your help, I’m looking forward to hearing from you,”.   Sincerely, Teresa S.

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Hi Teresa,

It sounds like your tenants are running over you like a Mack truck.  They are costing you money! If I woke up in your shoes this morning I would begin the eviction process immediately.  Don’t change your mind, or listen to any sob stories.  Put them out and find some good tenants that will pay their rent.   Start fresh and be firm with your new tenants.  If you haven’t already, sign up for a free account with the American Apartment Owners Association.  You can find a link on my blog.  I recommend you take advantage of the discount and join as a premium member so you may screen future tenants.

Keep track of all the rent they owe and your out of pocket costs to ready and re-rent the unit.  After they are gone, let me know and I will try to help you with the debt.

Don’t let tenants like this run over you!

Keep your chin up and press forward.  Good luck, and let me know if I can be of any help.

Regards, Bill Gray

Bill@thelandlorddoctor.com

www.thelandlorddoctor.com

Copyright 2009

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Apartment Association of Southeastern Wisconsin Tradeshow and Educational Seminar

Posted by Bill Gray on August 21, 2009

I am scheduled to speak with members of the Apartment Association of Southeastern Wisconsin September 16th.  I look forward to meeting members and talking with them about how to collect their tenant debt. 

Contact: Tim Ballering “10th Annual Landlord Tradeshow & Educational Seminar” for Apartment Association of Southeastern WI on Meetup
Serb Hall, Milwaukee, WI on Wed Sep 16, 12:00 AM

Posted in Credit Bureau Reporting, Landlord Tenant, Tenant Debt Collections | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment »

When a Tenant is Behind in Rent, When Should You Call it Quits?

Posted by Bill Gray on August 17, 2009

[tweetmeme source=”your_twitter_name” only_single=false http://www.URL.com%5DToday I reviewed over eighty tenant debt accounts and noted that the average balance due is significantly higher than a year ago. With theemptypockets exception of the most expensive areas (such as California, New York City, and the northeast), the average amount of tenant debt is normally between $2500 and $3000.

I separated all accounts over $4000 and took a hard look at them to determine why there were so many high balances.  The answer was that landlords allowed tenants to go month after month paying little or no rent, before they were eventually evicted or the tenant skipped out. This is obviously a sign of the times.

I assume landlords are allowing tenants to live in their units for three to four months without paying rent for one of two reasons:

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Posted in Collection Agencies, Credit Bureau Reporting, Evicted, Landlord Tenant, Tenant Debt Collections | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 2 Comments »

Landlords Should Consider Settling Tenant Debt

Posted by Bill Gray on August 11, 2009

[tweetmeme source=”your_twitter_name” only_single=false http://www.URL.com%5DSome of my most uncomfortable moments have come when talking to landlords about considering settlement offers.  Often, the landlord is somoney4 emotional about the debt he or she is owed that settling is not an option.

After 12 years of reviewing tenant debt accounts, I can tell you with certainty that landlords who seriously consider settlement offers recover much more money than landlords who don’t.

If a previous tenant makes a settlement offer, he or she is looking to resolve the debt for some reason right now.  Maybe he is trying to rent another place to live, or trying to obtain a mortgage or another loan. For whatever reason, he is motivated to pay you.  If you ignore the offer, he may find another way to rent or get a mortgage or loan without paying you.  This may be your only opportunity to collect even part of what you are owed.

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Posted in Collection Agencies, Credit Bureau Reporting, Evicted, Landlord Tenant, Tenant Debt Collections | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 3 Comments »