2020 has proved to be a challenging year indeed. Property managers are experiencing a trickle-down effect in the face of nationwide layoffs and economic upset of the COVID-19 pandemic. To add another layer of complication, shelter-in-place orders and social distancing mandates make apartment showings, paying rent in person, and other operational requirements even more difficult.
Luckily, new technology continues to emerge, enabling the rental market with new ways of conducting business for the digital age. Adopting new tech into your organization is not just an option for the more sophisticated property management groups; it is a requirement to remain competitive for all players in the housing industry.
Applicants and Tenants expect a digital tenant screening experience
Applicants not only expect contemporary amenities, but also expect a modernized application, and ongoing property management experience. From the first contact and application stage to rental payment portals and maintenance, tenants expect a primarily digital experience.
Tenants appreciate the operational improvements that property management software provides, including improved customer service capabilities, automated rent reminders, and opportunities to give feedback on their experience of residing in your property.
Property managers appreciate that property management software creates business advantages that can positively affect the bottom line. The ability to strategically verify tenants at light-speed is beneficial to both PM's and applicants.
Tenant screening software has a significant effect on future rental property portfolio earnings
Using online rental applications improves efficiency and can decrease the amount of time between vacancies — a critical factor in maximizing the return on your rental investment. Additionally, most renters expect the ability to find and apply for rental properties online and may pass on a listing if that ability is not available.
Key features of modern tenant screening software include:
- Customizable applications, integrated credit scores, and background checks are standard features of the modern tenant screening
- See an applicant's employment status, income, rental history, and references from past landlords. Some will also compare their income to the rent amount.
- Digital signatures, secure data and credit card processing, online rental booking, and integration with your accounting software are also widely available.
- Automated rent payment reminders, online maintenance portals, and convenient rent collection apps are built-in to improve the landlord-tenant relationships.
- Acceptance modeling that can be tailored to suit your organization's occupancy goals based on your risk tolerances while minimizing the risk of human error and possible discrimination.
- Performance dashboards provide valuable insights into the overall health of rental portfolios and provide forecasting analytics to plan for the ever-evolving future of the rental market.
Additional standalone property management landlord related apps help you to improve workflow, manage time and expense better, and improve communications with tenants. All of these benefits point to a bright future for both property managers and tenants alike. But with all change, 'proceed with caution' is timeless advice.
Digital tenant screening opens opportunities for fraud
It seems like these tenant screening tools provide everything property managers need to protect their investments and select the right tenant, right? Well, not exactly. As technology becomes more sophisticated, so do the users of said technology. This increase in accessibility and convenience comes risk — which property management companies are not appropriately prepared for.
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.
Application fraud is rampant in the credit card industry, but it is also surfacing widely in the rental industry. The deceptions vary: some applicants inflate income; others hide it or disguise its source to cover criminal activity. With the prevalence of image manipulation technology combined with affordable advanced personal scanning equipment, it is easier than ever to alter a document and pass it off as legitimate. While property managers love being off paper, if they are not aware of the rise in rental application fraud, they are poised to lose financially.
Misrepresentation of information can lead to evictions
Evictions are a costly problem to have. The typical property manager in a 2020 study by ReRez Research says at least 15% of evictions involve tenants who submitted fraudulent rental applications. Respondents also reported the average cost per eviction to top $7,685 per incident due to unpaid rent, legal fees, and other costs. A firm managing 3,000 units with a 20 percent eviction rate may endure 600 evictions every year, totaling more than $1.3 million per year in expenses related to fraudulent rental applications alone.
Evictions incur monetary losses and can be tough emotionally on property managers, apartment communities, and renters alike. Preventing evictions due to fraud requires vigilance, and flagging fraudsters before they move in may require transforming a landlord's approach to property management by incorporating more fraud prevention techniques. With this combination, landlords can be confident in selecting new renters in this new digital era.
Identify tenant application fraud with Spirited
Your tenant screening software is only as good as the data that goes into it. Spirited's proprietary software is a critical first step in the modern tenant screening process. It integrates seamlessly into your existing tenant screening process, regardless of which tenant screening tools you use. Spirited's technology analyzes a wide range of properties looking for evidence of fraudulent alterations. Ultimately, we certify whether the documentation is authentic or fraudulent.
Spirited’s tenant screening software provides:
- Image analysis which scans image properties to determine if the document has been manipulated
- State of the art detection algorithms to help detect whether or not a document has been tampered with, and
- A historical analysis which reviews the submitted documents against a historical database to identify additional micro anomalies
Protect your rental investments with Spirited. See how data-driven tenant screening can help you avoid evictions. Try out the ROI calculator to see how much you could save annually or request a demo to learn more.
If you enjoyed this post, you might also enjoy our new eBook, "21 Proven Strategies to Avoid Evictions."
