When you consider how much a mortgage can affect someone’s credit, it’s no wonder that “last year, Experian, one of three leading credit-reporting companies, added a section to millions of credit reports showing on-time rent payments.” (The New York Times. January 08, 2012.) The addition was so successful that Experian is now accepting reporting about problem tenants too. Things like bounced rent checks, late payments, and even “leaving before the end of a lease” will start showing up on credit reports later this year. This follows a recent trend that started with companies like CoreLogic and FICO who integrate tenant payment histories and other things that are not considered “consumer credit” into reports that are designed to help landlords consider the financial risks of leasing to applicants.

Leases will begin showing up on credit reports as installment loans. The entire balance of the lease will be reported each month (obviously decreasing with each payment). As long as all payments are made on time, the reporting actually helps tenants build their credit. Conversely, for tenants with poor payment habits, their credit will be negatively affected. And it’s about time! Until now, landlords have been left with costly court processes as the only real recourse for collecting on dead-beat tenants. And we rarely actually re-coop the losses. It’s obvious that this new reporting option can be a huge win for our industry. As communication between landlords and credit reporting companies gains strength, pulling a simple credit report will help the next landlord see the “rental history” of their applicants and make more informed decisions. Likewise, if tenants know we are reporting to credit agencies, most will make paying their rent and completing their rental obligation more of a priority. The important thing to remember is that we are the key! Credit agencies can only report what they are given. So, to make the system profitable, we must get involved.

Information is currently being captured electronically by online property management software companies (AppFolio, Buildium, and others). But never fear, Experian is working on a system that will allow independent landlords to report problem renters. Until then, most landlords who want to report will need to contact the credit agency and make manual reports. So, although the system is still in the beginning phases and will need to have some bugs worked out, it is a step in the right direction. For more information, contact Experian, CoreLogic, or search online using key words ‘Reporting Rental Payments to Credit Bureaus.’

Click here for map and more info.

Dear ARA Landlords,

What a whirlwind that past year has been! It was our first year as an officially organized Landlord group and we did A LOT for being “first-timers.”

· We were able to “slim down” and/or eliminate several very harmful items from the proposed Chapter 13 – so that the new Ames Rental Code is much better than it could have been!

· We have created a common voice for landlords in Ames that is both acknowledged and respected.

· We joined forces with other landlords associations throughout the State in lobbying for less arduous codes and support forthcoming legislation that would severely limit individual city government rights to impose more restrictive ordinances on landlord than those already in place on the state level.

· We have created a cohesive group of landlords all fighting to preserve both our rights and the collective rights of our tenants (especially in the form of affordable housing). PS – Welcome to our most recent member: Hunziker Property Management.

· We have established working relationships with our many of our council members and have their support on many key items that remain serious hurdles in our everyday businesses.

· We have held several “general meetings” for both informative and goal-setting reasons. (Who can forget when a couple hundred of us showed up to a city council meeting wearing white shirts?)

· We created a uniform appeal sheet meeting the city’s criteria so we can appeal inspection items without hesitation. (I hope everyone is using it!)

· We started a website with a landlord login that provides access to a myriad of forms and valuable rental-related information for ARA members.

· We organized as an official nonprofit organization, so your membership dues are tax deductible.

Looking back, we really have accomplished some great things. But, there are still many monumental and serious problems to overcome.

· The city originally stated that appealing to the PMAB is free, but has begun to “spot” charge for appeals. The city council informed us that the rental inspections division wasn’t receiving appeals so had to reason to believe anything was a problem for landlords; and further that the division welcomed our feedback and appeals. We MUST have the right to question a decision with fear of a financial hit.

· The battle over plumbing continues (especially S traps) and needs our attention. It will take more than a couple of landlords to get this city action repealed. We need everyone so our voices will be loud enough to rise above political rhetoric.

· The city continues to offer financial incentives to individuals willing to buy a current rental and convert it to owner occupied. If the goal is to improve homes in Ames, why can’t a landlord apply for funds to improvement those same properties? If the goal is to eliminate rentals in residential neighborhoods, we challenge the city of Ames to come out and say that.

· The restrictions being placed on properties trying to enter the rental housing market for the first time are in many cases completely cost prohibitive. A 1910 building will never be a 2009 building. Let’s keep the history in our cities architecture in-tact.

· Properties that hold a current LOC (and have had a current LOC for many decades) are now being inspection under the new chapter 13. The reports have been frightening. Some reports are coming in requiring over $10K – $15K of repairs to maintain rental status. This is not acceptable!

So, with a mix of emotions (thrilled with the progress we’ve made and overwhelmed with the problems that still exist), we thank you for your continued participation with the Ames Rental Association. Even if we were to only solve one problem this coming year, it would same most of you more money than the cost of membership, including “the big guys.” But, we aim to do better than that. Let’s keep up the momentum and make even more progress this year towards making Ames a rental-friendly city for landlords, neighborhoods, and citizens.

The Ames Rental Association

Kelli Excell, Dan Craig, David Keller, Paula Shriver, Jim Gunning, Lad Grove, Chuck Winkleblack, Mike Frisk, Dale Vanderschaff, and Stacy Woodward