Rental Management Administrative

The oft spoken complaint from both directors and homeowners in Community associations is “they never return either my phone calls or my emails”.

The truth of the matter is we all delay returning some calls sometimes even with good reason. We want to check the facts, we want another opinion, maybe even a legal one, and we want the customer to cool down first. Most of the time however we just don’t want to take or return the call because we know it is going to be awkward, difficult, stressful, obnoxious and certainly not pleasant. Our day would go a lot better if we attacked the problems first and having dealt with them however bad they might be we now have the ability to focus on managing the routine functions without the dreaded call or email waiting out there for us.

If we could only realize that prompt attention to the difficult saves us from worrying about it all day. The news or complaint or request or demand may not be what we want to hear but now it’s over and we can move on to other things rather than be suspended inanimately waiting to deal with the dastardly call. If we recognized that our job is to sooth the fevered brow, to lower the temperature as I call it, we should be ready and eager to learn how better to do something. Owning up to a mistake, omission failure is in itself cathartic, it allows our emotions to relax and slow down. Instead of building up a fever postponing the inevitable we are able to release some of the tension as the difficult emotion has passed. The goal of management should be to answer all calls and emails in a reasonable time. Each person has their own definition of what is reasonable. A blackberry user probably has a shorter fuse than someone who still has a rotary phone at home. Whatever the standard adopted by the management company it should stick to it. There is even some software that tracks phone calls.

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Sadly, I can tell you some do not. We not only run a credit report but we get the FICO scores as well. From time to time a tenant will find themselves in financial difficulty. Who hasn’t been there once in a while? What we are looking for is the fact that they are out of, or climbing out of their difficulty. In recent times quite a number of very good tenants have previously lost their homes in foreclosure. If the remainder of their credit report suggests no other major issues they are a potentially good risk. Surprisingly many owners acting for themselves never even run a credit report. Furthermore, they do not check employment or previous landlords. Occasionally, the current landlord might give a favorable report just to be rid of a troublesome tenant, but usually the prior landlord will be truthful. Sometimes it is wise to verify the source of a reference. A crafty tenant might even supply a name or two of friends who will attest to the worthiness of their friend. The old adage inspect don’t expect applies here. We suggest you not take a credit report run by someone else. It is not that hard to cut and paste or clean up with a few judicious strokes photocopy and deliver.

Get written job verifications and when possible written landlord verifications too.

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In order to run a credit report on an individual, first you must have a signed application stating that the applicant agrees that the Landlord, Manager, or Agent can obtain a credit report.  The application should contain at least their social security number, a birth date, and a current address. Even in this time of economic depression and era of bad debts, credit checks still play an important role in screening tenants.  The score is just one of many facets of a credit check that management uses to determine whether or not a tenant can afford to rent a property they manage, but there is more to it then just a score. The scores of credit reports will vary between 400 and 850.  A score of 700 or above shows that an individual has been trusted with credit and has made good on repayment of borrowed money.  A score between 600 and 700 generally can be evaluated to determine the cause of the lower score, but the individual may still be a good tenant.  A score below 600 generally is a warning that they have not been diligent with their money, but this may be due to a bad mortgage or major medical or education bills so further investigation is definitely needed if you think you might want to rent your house to them.  Anyone with a score below 500 has had serious problems over a long span of time and the credit check should be accompanied by an eviction check. If you feel further investigation is necessary, a lot of information about an individuals history can be found on a credit report.  Variations of information are also provided in most reports.  In the “Variations” portion of a credit report, you will see any variation in personal information, address comparisons, and employment comparisons.  Your application should ask for current and the previous address and these should match.  There is also an area where employment history is stated and this should also be a question on an application and at least the last employer should be listed on the credit report, maybe not the current one if it is a new job. A credit history shows when the credit account was opened, what the current balance is, what the past due amount is ($0) and whether or not the individual has been late on payments.  This will show as the number of times the payment was received either 30 60 or 90 days late.  The present status of the account has many different possibilities;

 

AS AGREED                    Great             Payment is being received on time

PD WAS 30                        OK                  Payment has been 30 days late

PD WAS 60                        OK                  Payment has been 60 days late

PD WAS 90                     Not that OK   Payment has been 90 days late

PD WAS 120+                 Bad                Payment was delayed more than 120 days

PAID CHGOFF                  Bad                 Went to collections

PAID COLL                        Bad/OK          Paid collections

COLLECTION                    Bad                 In collection with no payment

BANKRUPCY                   Worst              In Bankruptcy – no payment received

 

A credit score is not always the be all and end all of tenant screening but may help in verifying whether a tenant is being honest.  You can find their last current address, where they have worked, and whether they have a good history in being timely with payments.  If you have a good feeling about a tenant then it may be worth giving them a shot.  Also, if the tenant was up front and open about their credit situation, they may be worth further investigation. They may also be willing to put up additional security deposit for the opportunity to rent your home or provide a guarantor or co-signer.   One landlord tip: check the owner of the properties they previously rented is the same as those listed on the application (they could just be “friends”)

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