The ever-changing economy makes it challenging for property managers in the rental industry to consistently maintain occupancy and meet revenue goals. Online tenant screening tools can save properties in time and money by streamlining the application process and improving decisioning strategies benefiting applicants and property owners alike.
Now is the time to establish fully digital, reliable methods to rate relative risk of your applicants, maintain occupancy, and increase resident quality. Say goodbye to messy handwriting, missing information, and waiting for paper documentation in the mail. Most online tenant screening tools utilize records from both state and national databases and provide accurate results in a matter of minutes. This is a game-changer for larger organizations in competitive rental markets that need to evaluate many applications on a given day.
The top online tenant screening platforms will ask the standard questions and offer secure portals for applicants to upload their documentation, including:
- Number of occupants (adults, children, pets)
- Name and contact info of applicant(s)
- Income statements and employment history
- Address history
- Proof of identification
- Preferred move-in date and lease term
These digital screening tools will also evaluate the credit profiles, court records, and income-to-rent ratios to decide if the tenant is a good candidate or is a high risk.
Rules-based tenant screening methods automate human judgment
Many online tenant screening tools assign a value to positive and negative customer application data, credit, and public record information. More advanced, statistical lease screening methods assign rankings to the applications providing landlords the ability to identify the best possible renters from the applicant traffic. Landlords can decide to relax or tighten their application acceptance criteria to respond to the shifting marketplace and keep units filled.
These screening methods are a time-saver and attempt to rate the likelihood of successful residency but ultimately rely on the judgment of whoever created the screening rules within the tool.
The pros and cons of online tenant screening
There's no doubt that today's online rental application process helps landlords efficiently choose the best residents from the applicant pool by providing an efficient, non-biased, and comprehensive look at their applicants. Expected renter performance models can be created and evaluated, providing risk scores for making operational decisions that increase the bottom line for property managers. While applicants prefer an online application because it's convenient, secure, and also speeds up the wait time. It sounds like a win-win for everyone, right? Almost.
Online tenant screening provides opportunities for fraud
The scores assigned to an applicant are based on the body of evidence presented – but what if that information is falsified? In our recent study, Confronting the Costs of Rental Fraud, we found that two-thirds (66%) of property managers reported that they had been the victim of fraudulent rental applications. Property managers also noted that 10% of fraudulent applications are going unnoticed during the screening process.
Technology enables rental application fraud, which in turn leads to evictions. Tenant application fraud includes falsified pay stubs, fake identification, and fraudulent employment records. This has been an ongoing problem with a sharp increase in tenant fraud for the past few decades. Affordable technology like high-quality scanners, digital cameras, and the availability of anything to be purchased online – forging documentation is easier than ever before.
The increase of online applications creates the need for technology solutions that identify, mitigate, and prevent fraud in tandem with your tenant screening. With the right combination, you can limit your risk of actually allowing a fraudulent applicant to become a tenant in the first place and prevent the high costs of the eviction process from hitting your balance sheet. By consistently screening your applicants with a trusted provider like Spirited, you dodge potential risky applicants.
How to identify fraud in your online tenant screening process
The best way to determine whether or not your applicant is lying to you is to deploy sound tenant screening processes. This includes both standard and technology-enabled best practices. Spirited's proprietary software is designed to integrate seamlessly into your existing tenant screening process. We make it easy to identify falsified application documentation such as pay stubs, identification, and more. You can detect fraudulent documents with advanced data-driven forensics methods by simply uploading the applicant's documents via the upload link. Within 24 hours, Spirited will analyze and review the documentation. Reduce fraud, screen tenants faster, and reduce costs for only $1.50 per unit per month for unlimited scans. Try out the ROI calculator to see how much you could save annually.
Spirited's proprietary software is a critical first step in the modern tenant screening process and integrates seamlessly into your existing tenant screening process. Request a demo today to see how Spirited can work for you.
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