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Five Ways to Encourage Residents to Pay Their Rent On Time

Making sure residents pay their rent on time and in full: it's possibly the most important task facing an apartment operator. Without the expected cash flow from renters, operating expenses become tough to cover and a community's bottom line takes a pounding. So how can operators encourage their residents to fulfill the terms of their leases? Below are five suggestions. Report rental payment historyWhen operators report their residents' positive rental payment history to the credit bureaus, they help those residents build their credit history. A strong, positive credit history makes it easier for them to secure car loans, credit cards and mortgages – and to do so at favorable interest rates. When residents understand how they can create a better financial future by paying their rent on time, they will be highly motivated to do so. A couple of studies have demonstrated the significant impact of reporting positive rental payment history. In 2013 and 2014, the Credit Builders Alliance conducted a pilot project in which eight affordable-housing providers reported the rental payment history of more than 1,250 low-income residents. Nearly 80 percent of the residents saw their credit scores increase, with an average rise of 23 points. Similarly, an Experian RentBureau study on the effect of positive rent reporting in nearly 20,000 subsidized housing residents revealed a considerable beneficial impact on the thickness of the renters' credit files. According to the study, 23 percent of thin-file residents moved to the thick-file category after their positive payment history was reported. Bottom line: r......
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