Proven multifamily screening techniques are essential today, but should rental screening criteria change due to COVID-19?
Yes. And with some special sauce for good measure.
During normal economic conditions, the apartment industry routinely relies on verifying employment through pay stubs provided by the applicant and checking for eviction notices on screening reports. However, operators today are rethinking how they vet applicants because millions have lost their jobs.
At issue is the dilemma of maintaining occupancy when a prospective renter comes knocking. During a downturn, the temptation to relax screening criteria heightens, but the risk outweighs the reward.
Brian Davis, who manages information technology at CF Real Estate Services, says that fraudulent applications are on the rise and they’re taking on new shapes.
“One of the biggest ways that we're seeing is pay stubs that are not legitimate, people using falsified identities, of course, using deceased persons for their identity,” he said on a recent webcast. “One that we're seeing more and more now, unfortunately, is the use of family members, or even children, to apply for an apartment using the child's credit to apply.”
The uptick is moving some to take verification a step farther and make physical checks instead of relying on a piece of paper provided by the applicant. While the information may be legitimate, the risk is too great not to fully assess.
Reaching occupancy goals may seem like a good thing, but not always. If a portion of renters are living on the fringe or are without jobs, the risk becomes greater for the property, especially if there is another COVID-19 outbreak.
“If that were to happen, now you have a lot of people at your property that may not be able to pay in case of a downslide again,” said JVM Realty Vice President of Information Management Kortney Balas.
Scrutinizing rental screening criteria and adhering to stringent verification processes has become so much more important.
Screening accuracy ensures confidence in vetting applicants
An effective screening tool enables the property manager to identify who’s who and calculate the risk. Most of all, it helps operators confidently make the right decision about an applicant.
RealPage Resident Screening provides access to the industry’s largest rental payment history database in addition to in-depth criminal background information and extensive rental credit checks. This database provides the best predictor of who will actually pay their rent, and it’s something other multifamily screening solutions don’t have.
The solution is driven by the industry’s first and only Artificial Intelligence-enabled scoring model based on data science to establish a robust level of rental screening criteria. Machine learning is applied to financial and rental history records to access critical financial information correlated with rent payment.
The result boosts the level of renter screening criteria so property managers can identify not only who is a good candidate to pay rent but also those who are most willing to pay.
Screening accuracy also ensures operators that they won’t miss a qualified renter who may have had late payment or credit issues in the past.
The right recipe for a rental screening solution
RealPage Senior Vice President, Financial Services, Matt Davis likens RealPage’s AI-driven screening solution to making a good meatloaf.
While the ingredients may be the same, what separates a good meatloaf from another is how the spices, flavors, and cuts of meat are blended. There are millions of possible ways to arrive at that good meatloaf, depending on the preferences of consumers.
Sticking to the same method each time will yield the same result and potentially turn away some. Variety is the spice of life, Davis says.
“We don't just have all the information about the resident or the prospect when they arrive, which is what everyone has, we have 35 million good meatloaves in our database,” he said. “We have 35 million outcomes. What happened after all those ingredients were used?
“We know exactly what it takes.”
Learn more about how RealPage Resident Screening allows multifamily operators to lease with total confidence.