Motivation To Get Tenants To Pay Rent On Time

RentReportersIt can be uncomfortable and inconvenient for property managers to hassle tenants who do not pay their rent on time. On the other hand, tenants who spend years paying rent on time never receive an acknowledgement for their efforts. What if property managers could provide an incentive for receiving rent on time from tenants? RentReporters has an answer. RentReporters is a credit report system that provides tenant rent payment history, and can be used to help build tenant credit. These credit reports can help or hinder tenants who are looking to purchase a home. Property managers who use RentReporters can help ensure timely rent while offering a chance for their tenants to build their credit history by demonstrating their ability to pay rent on time. We spoke with Jason Greenman from RentReporters to learn more.

APM: This is the first time I’ve heard about a service like this. Would you mind going into more detail about RentReporters?

Jason: I’d be happy to. Maybe just so I have more context, tell me about All Property Management and what you guys do. You connect property owners looking for property managers? Is that how your business works?

APM: Exactly.

Jason: This is a great opportunity to introduce RentReporters because we’re in the process of rolling out our service to a much broader set of landlords and property managers. I’ll tell you about that in a second here.

Our core business is rental payment reporting to the credit bureaus. Normally, rent payments do not show up on a credit report, but for most people, it is their largest monthly expense. Many of those folks, about 58-60 percent of them want to buy a house someday.

What we realize is that most tenants, when they go to apply for a mortgage on their first home, they have a very thin credit profile and are unable to get the loan that they wanted. They can’t get the terms that they want.That’s the fundamental problem that we’re trying to address. What we do is we work with the landlords and tenants to facilitate the reporting of that payment stream to the credit bureaus. Currently, we work with Transunion and we also work with an alternative credit bureau called PRBC, which is the biggest alternative credit bureau that’s not one of the big three. The service is free for landlords and property managers, but we doask them to sign our terms of use.

We obtain their tenant data or contact list for the tenants, and then reach out to the tenants to get them involved in service. That’s really all it takes. It’s a pretty straight‑forward process. Another service we offer, for a fee, is a history of payments. The whole point is to have long‑term tenants, get credit for paying their rent on time, and have that show up in the credit report down the road if they want to apply for a mortgage at some point or any other kind of credit that’s going to help them out.

There are two main benefits from a landlord and a property manager perspective. One is that the landlord or property manager can offer this service to their tenants and to prospective tenants.

Landlords and property managers who use our service can send a message that they care about their tenants and want to help you build their credit rating. Landlords and property managers can help build credit profiles by being able to report this data. They can use this at no cost and market this as an amenity for their tenants and for prospective tenants.

Landlords and property managers also send a signal to tenants saying, “I’m serious about collecting rent on time and I’m going to report your positive rental payment history to the credit bureaus, but if it is late we are going to report that as well.” There is a benefit in letting tenants know that their payments are going to be reported to credit bureaus because they are more likely to pay on time, but also have an opportunity in improving their credit score by paying on time.

APM: What made you develop this product or what’s the background of this story?

Jason: Well, I became the CEO of the company back in September. The founder of the company has been working on the concept for years. He has a really strong background in credit reporting and consumer credit reporting. However, the development in technology over the past few years, widespread consumer Internet and the comfort of consumers with reporting data online really allows this concept to come into place.

APM: Are there other products like this out there? Or is this something new?

Jason: We are pretty unique. What’s unique about us is that we work with both the landlord and the tenant. We will be reporting to all the three big credit bureaus once we get those relationships finalized. I’ll give you an example. There’s a company called “Rent Bureau” that is a division of Experian. However, they only work with the largest property managers and property owners in the country. They do systems and technical integration work with the property management software of those companies to make their solution work. That’s the reason why Experian is working with us, because they realize they only addresses 2-4 percent of the market, in other words less than ten million renters out of a population of 108 million. We think we’re pretty unique.

APM: I can see how both tenants and property managers can benefit from this. What kind of feedback have you received from customers who’ve used this?

Jason: The feedback from tenants is uniformly positive. People realize that it takes a few months for data to show up on the credit reports. It certainly takes a few years of history for it to really impact the credit profile itself. If you reached out to our customers today, probably every last one of them would say, “Yeah, I’m excited about the potential!”

We’re still in the early days of this. We’re in the process of assembling our customer testimonials. For many customers it’s free. You can imagine they’re pretty excited about the potential.

APM: Is there anything else you’d like customers to know?

Jason We’re looking for landlords or property managers to work with us to build out our system. It’s free and requires a limited amount of effort on their part to get started. We believe we are in a unique situation because we have a lot to offer both property managers and tenants.

To Sum It Up!

RentReporters offers a chance for renters to build their credit history through their timely rent payments. This in turn benefits property managers who can ensure that rent is paid on time, but can also build relationships with tenants by providing this service.

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