The multifamily market didn’t exactly crater in 2017. In fact, according to preliminary numbers from Marcus & Millichap, a commercial real estate brokerage and research firm, the average effective apartment rent in the U.S. grew by 4.5 percent last year, to $1,343 per month.
Still, there’s no denying that apartment markets in many metros across the country have softened in recent years, and operators must always be on the lookout for a true downturn. What goes up must come down.
When the pressure to fill their units ratchets up, operators must make sure their screening process is in first-class shape so they have a crystal-clear view of the risk an applicant poses and they can move quickly to sign suitable prospects. To do this, operators need to eliminate manual rental payment history checks and incorporate payment history that is gathered electronically and automatically.
Below are five ways manually checking payment history by phone puts operators at a disadvantage in markets both soft and strong:
1. They’re impractical
For applicants with significant rental history, it can be virtually impossible for leasing agents to reach someone at every community an applicant has previously rented to check payment history.
2. They can be incomplete
Applicants may not list all the apartment communities they’ve ever rented from, because they either simply forgot about a community or intentionally left a place out after a bad experience. This leads to operators having an incomplete picture of a prospect’s past.
3. They don’t work
At a session at the 2017 NMHC OPTECH conference in Las Vegas, an executive from Alliance Residential highlighted perhaps the most important reason to steer clear of manual payment history checks: they’re ineffective.
An internal study led the operator to discover that its communities that conducted manual checks experienced more evictions than those that didn’t, according to Rachel Davidson, senior vice president of performance management for Alliance. This was probably because the information manually gathered by leasing agents wasn’t accurate.
Alliance now incorporates automated rental payment history into its screening process, Davidson noted.
4. They unnecessarily burden an already overloaded staff
Leasing agents already have many demands on them, and having to manually check rental payment history consumes vast chunks of time that can be put to better, other uses. When accurate rental payment history from a third-party vendor is automatically incorporated into a community’s screening process, this frees up leasing agents to work on other responsibilities, such as leading prospects on property tours and caring for the community’s current residents.
5. They slow down the screening process
In softer apartment markets where communities are battling to keep occupancies up, apartment owners and operators need to have the ability to move quickly on the right prospect. Manually checking rent history only slows down the screening process, and before you know it, that lead has been approved for another apartment home with a quicker screening process.
With leasing season ramping up, now is the perfect time to resolve to bring your rental payment history checks into the modern age. Your leasing agents and operations teams will thank you for it.