Given the uncertainty in the economy and world events, it’s more important than ever to have a strong understanding of personal finance topics. What is happening in the world is impacting the wallets of renters, property owners and operators alike, however, financial literacy in the United States is low and access to financial education is not equitable.
Every three years, the National Financial Education Study is conducted to measure the financial capability of Americans. In the latest survey, researchers found that the amount and quality of financial education is correlated with better financial outcomes. But access to educational resources is only one part of the solution.
Given that on-time rent payments are a key indicator of financial stability, Esusu partners with property owners and operators to provide free rent reporting services to residents across the country - allowing them to establish and/or build credit and wealth.
Higher credit scores mean different things for different renters, but ultimately leave them with more money in their pockets:
● For those with low or no credit scores: Establishing a healthy credit score for the first time unlocks “bank credit”, including access to credit cards and low-interest loans instead of “non-bank credit” like predatory payday loan lenders.
● For those with prime credit: Credit-building may not seem as valuable for market-rate renters with established credit scores, but a higher score can help them combat the costs that they’re fighting during inflationary times. On average, Esusu renters saw as high as a 51-point score increase in 18 months, enough to bring a renter from subprime to prime, or even prime to super-prime.
Having credit is especially important now as consumer prices have increased at the fastest rate since November 1981, and in July, Consumer Price Index inflation data surged to 8.5% from a year earlier. Although price increases are being seen across all goods and services, they are notably high for the essentials, including groceries, rent, and ongoing fluctuations in gas prices.
Economic uncertainty hurts the lowest-earning Americans most, and chances are many are feeling the impacts of these issues. While homeowners were mostly locked into low mortgage rates, renters are the ones feeling the pain of increased rent prices. Low-income consumers are also being forced to stretch inflation-crimped budgets and make tradeoffs on what essentials they can afford.
If your residents remain able to pay their rent and afford essentials, you’ll reduce the likelihood of vacancies or evictions. With total eviction costs (including lost rent, vacancy, legal fees, repairs, turnover, leasing, and other costs) ranging between $2,500 and $8,000 per case, a key strategy for riding out the uncertainty in the economy is renter retention.
So what steps can property owners and operators take to best prepare themselves, and their renters, financially for the uncertain road ahead? Rent reporting, for one, is a differentiated amenity that can lead to better financial stability for residents. Reporting residents’ on-time rental payments to the credit bureaus can ultimately help them establish or boost their credit scores, a main factor in building wealth in America.
Learn More
Esusu is the all-in-one rent reporting platform that helps increase on-time payments, prevent evictions, and lower vacancies all while enabling healthier financial futures for your renters. For more information, or to help you get started, visit us at https://esusurent.com/property-managers/.
|