Posted in Uncategorized

How and Why to Report a Delinquent Tenant to the Credit Bureaus

If you have tried being a landlord for your rental property, you are likely to know that being a landlord is not only collecting money and dealing with maintenance requests. Sometimes it’s more about disputes, negotiations, and even reports to the credit bureaus. Yes, property management can boost your problem-solving skills better than a specialized class at university.

 

The bitter truth is that even the most competent landlords are not immune from dealing with unfaithful tenants. There is no type of renter screening that can reveal one’s true colors. Given this, it is highly advisable to hope for the best, but be prepared for all eventualities. Since delinquent tenants are probably the worst of what can happen to a landlord, we’ve created this supreme guide on how to deal with them.

What to Do About Delinquent Tenants?

Eviction and reporting to the credit bureaus should always be considered the last resort measures. It is safe to say that those are the most efficient ways of dealing with delinquent tenants, but there are many things you can do before going to extremes.

  • Double check the lease agreement and payment reports making sure that your tenant is indeed late.
  • Send a Late Rent Notice saying that the rent is already past-due. Include a short warning about possible legal actions.
  • Give your tenant a phone call to clarify the situation.
  • Provide a Quit Notice that clearly conveys how much you are owed and the final due date by which the debt must be cleared. It is ok to tell about your intent to evict.

Should none of the above-mentioned measures help, feel free to report your tenant to the credit bureaus and start the eviction process.

Why Reporting Tenants to the Credit Bureaus?

Just like good behavior calls for appraisal, bad behavior requires punishment. That’s the way the world wags. Dealing with delinquent tenants is tiresome and annoying, and it’s likely to result not in your favor. However, there is one thing you can do to lighten things up. And this is reporting unfaithful tenants to a credit bureau.

Under the best circumstances, this decision can even help you get the owed rent money or compensation for the damage caused by a tenant. But reporting to a credit bureau is not only about money; there is a higher purpose behind it. When you report an irresponsible tenant, you save other landlords from running into the same trap by renting their properties out to unfaithful people. Although you reveal the problem of only one person, and it may seem like a drop in the ocean, it still matters.

How to Report a Delinquent Tenant?

The answer to this question depends greatly on your regular landlord’s behavior. Experience shows us that all landlords fall into two camps. Those who report tenants regularly and those who do not care about it at all. Depending on which camp you belong to, your course of actions will be different.

If You Report Regularly

If you report both the good and the bad about your tenant’s behavior on a regular basis, all you need to do is keep up with this activity. Your claim will be registered automatically.

There is a great virtue about regular reports. Firstly, it disciplines your tenants to pay on time since they know that their paying behavior is under supervision. Secondly, it’s easier for you to report a delayed payment or any other problem with your tenant once you are already a regular client of the credit bureaus.

If You Don’t Report Regularly

If you prefer not to trouble yourself with monthly reports, things get a little bit harder. But it is still not a rocket science, so you will surely be able to figure things out.

First and foremost, you need to understand that there are many different bureaus you can report to. The chief among them are Equifax, TransUnion, and Experian, and they are also known as ‘the big three.’ Each one maintains a consumer credit database of its own, and you need to become a registered client to be able to report information. If you fail to subscribe, your information will not be included in a tenant’s credit history. Subscription requirements vary by the bureau, but they are usually limited to paying registration fees and having a required equipment to be able to submit reports electronically.

The next step you need to take is associated with collecting necessary documentation. If your tenant is guilty of delayed payments, you’ll need to provide unpaid bills to support your claim. If your problem is related to the damage your tenants refuse to pay for, then you’ll have to provide photos that illustrate and vouch for the problem.

The last but not least, you will need your tenant’s social security number. Although some landlords believe that the habit of collecting SNN numbers has already sunk into oblivion, it is better to be safe than sorry.

What Else Do You Need to Know About Reporting Tenants?

  • Rental information falls into the category of ‘alternative credit data,’ meaning that you are not obliged to report the credit information of your tenants, but you can do this at your own discretion.
  • Since negative reports to the credit bureau are damaging to the tenants, you hold a legal responsibility of updating all information both timely and accurately. Make sure to notify the credit bureaus once the debt is paid.
  • According to the law, you must notify your tenant about a negative report within 30 days from the moment of submitting a report.
  • You hold a legal and moral responsibility to report only accurate information. Otherwise, you’ll become a subject of civil penalties or fines.

As you can see, reporting rent to credit bureaus is a little confusing, but it is nowhere close to impossible. If you made it here, you know why and how to report your tenants to the credit bureau and you can explain in detail why this measure is necessary. Armed with knowledge, you are one step ahead of the majority of landlords.

Advertisements
Posted in General

Don’t Replace Your REALTOR With The Internet

With the influx of new technology and web-based solutions, it isn’t a surprise that everything is moving fast into the era of the internet. From sites like Uber to GrubHub, we generally can pull up our phones or laptops to order what we want with ease. And with every industry being revolutionized by technology, the same methods are “attempting” to be applied to the real estate industry.

pexels-photo-313691.jpeg

.

We could all agree that the simplification of the process through paperwork would be much appreciated by agents and buyers/sellers alike, but the attempt of replacing the agent by sites like Zillow and other third-party resources can lead to a snowball effect of The Disaster. Think about real estate being smack dab in the middle of the fast food and a doctor. You can use your mobile device to quickly place your order for a $20 meal, but when it comes to getting a surgery, you’ll want to put that phone down and visit a professional. Now think of your real estate agent is in the middle of all of that. You can use your devices to look for a home, look at market data the way you look at WebMD, knowing not to take it too seriously because you need a real professional’s input, but it’s fun and gives you a general idea of what to expect. But therein lies the issue, the data online is an oversimplified version of what goes into the process of buying and selling. The same way it oversimplifies medical diseases and surgeries, you’d still expect to get a professional’s diagnosis.

Although a real estate agent isn’t quite like a doctor, the industry in its legalities, contracts, and processes is similar in the sense that it needs to be taken seriously. Looking for a house online and wanting to put an immediate offer on one can be exciting and fun, but the issues that require a professional’s guidance comes after the initial contract is written up and the hard work comes into place to actually make the home your own. Same for sellers, if you decide to put your home on the market and want a website that will give you an automatic offer, how do you know you’re not being taken advantage of in the price? But most importantly, how do you know you’re not being taken advantage of in other aspects of the contract? Because there is a lot more to the sale of the home then just agreeing on a number.

The next time you’re digging through public sites for homes for sale, and getting instant home valuation estimates, keep in mind that this is a simple process to give you an idea of your market. A very general idea. But after you’ve found the perfect house, or after you’ve decided that the numbers make some sense for you to sell

 

, call your favorite real estate

agent and make sure they give you a more detailed look into the market and assist you through the full process, not just the exciting first parts. Because it’s going to be in the middle of a contract when the lending is falling apart, or negotiati

 

ons can’t be made on repairs and emotions are at an all-time high, th

 

at you are going to wish you had put down your laptop and had an agent fighting for you by your side. Use the internet, have fun with its amazing resources, but don’t let it replace your agent. We aren’t in an age, just yet, where technology can do everything a professional can.

Posted in Home Buying

How Much Income You Need To Buy A Home In Your State

It’s no mystery that cost of living varies drastically depending on where you live, so a new study by GOBankingRates set out to find out what minimum salary you would need to make in order to buy a median-priced home in each of the 50 states, and Washington, D.C.

States in the Midwest came out on top as most affordable, requiring the smallest salaries in order to buy a median-priced home. States with large metropolitan areas saw a bump in the average salary needed to buy with California, Washington, D.C., and Hawaii edging out all others with the highest salaries required.

Below is a map with the full results of the study:

us income
How Much Do You Need to Make to Buy a Home in Your State? GoBankingRates gave this advice to anyone considering a home purchase,

“Before you buy a home, it’s important to find out if you can afford the monthly mortgage payment. To do this, some financial experts recommend your housing costs — primarily your mortgage payments — shouldn’t consume more than 30 percent of your monthly income.”

As we recently reported, research from Zillow shows that historically, Americans had spent 21% of their income on owning a median-priced home. The latest data from the fourth quarter of 2017 shows that the percentage of income needed today is only 15.7%!

Bottom Line
If you are considering buying a home, whether it’s your first time or your fifth time, let’s get together to evaluate your ability to do so in today’s market!