Are you looking for ways to make your apartment community more efficient and effective? This is Part 5 of our Apartment Vacancy Analysis series, which will help you find and fix the gaps across the marketing and leasing chain, and offers practical strategies and tools to help take your apartment community to the next level! Access the full table of contents available below.
🤕 Problems & symptoms of not properly vetting lease applicants
Fraudulent lease applications, ghost residents, and the need for evictions are increasing.
When you're so focused on occupying units, it's easy to begin ignoring minor things, like, 'Are there going to be any potential issues with this resident?'.
That's why evaluating the 'qualified' stage of your marketing and leasing chain is critical to verify that your community accepts lease applications from individuals who abide by their financial and neighborly obligations.
Neglecting basic tenant screening procedures in this day and age, where there is more technology available for someone to steal another's identity or manipulate legal documents when applying, could cause serious issues down the road for your apartment community.
Neglecting basic tenant screening procedures in this day and age, where there is more technology available for someone to steal another's identity or manipulate legal documents when applying, could cause serious issues down the road for your apartment community.
In a January 2024 report from the National Multifamily Housing Council, a staggering 70.7% of rental housing providers surveyed reported increases in fraudulent applications and payments, as well as fraudulent documentation of financial statements and identities in the past 12 months.
There's also a rise in 'ghost' residents, or individuals who lease a unit, pay the deposit and first month's rent to guarantee acceptance to the community, but then stop paying rent while staying as long as possible until leaving without notice for you to never hear from or find again without difficulty.
These issues, of course, contribute to the rise of necessary evictions alongside those suffering through economic challenges.
🤦🏼♂️ Common mistakes that put your apartments at higher risk for fraud
Waiving deposits or application fees as concessions.
When you're choosing not to collect any money up-front and making it basically free to move into your apartment community, you're putting things on a tee for fraudulent actors.
Not thoroughly vetting residents.
It's also problematic to forego or ignore any rigid criminal background or credit checks for residents. Again, with more means for document manipulation, you must verify that things are in good standing to avoid a problem.
🙌🏼 Best practices to protect your apartments
Keep application fees and deposits in place.
It's the simplest way to ensure no one takes advantage of your apartment community in the application process.
If you're trying to increase occupancy, a better alternative than waiving deposit or application fees is offering them back as a credit on rent after someone moves in.
This way, the tenant will be more qualified to pay their monthly rent consistently in the future because they were required to pay an application fee, deposit, and first month's rent—all serious financial commitments before moving into your community.
Apply new tech to application screening.
Knowing that fraudulent applications are rising, you must invest in tools to help you vet each applicant more thoroughly to protect your community.
It has reached the point where no community has the capacity or capability to diagnose fraud accurately.
🛠 Tools to help ensure your tenant screening process is strong
Check out these different resident screening vendors.
We recommend AmRent, Rent Butter, and AcuTraq to help ensure your residents are correctly qualified.
➡️ Next page: Is your apartment's application process to blame for vacancies?
Complete Apartment Vacancy Analysis Series
Introduction: What's causing your apartment's vacancy? Here's how to find & fix it
Part 2: Is your apartment's renewals strategy causing more vacancy?
Part 3: Are your residents satisfied with their experience at your apartments?
Part 4: Are you accruing excess vacancy loss after units lease?
Part 5: Are you properly vetting your apartment's lease applications?
Part 6: Is your apartment's application process to blame for vacancies?
Part 7: Are your apartment tours helping overcome vacancy?
Part 8: Do you have enough 'good' leads to improve apartment leasing?
Part 9: Is your apartment website converting leads to leases?
Part 10: How qualified is the traffic to your apartment website?
Part 11: What about pricing?! How rents affect your apartment's performance