How to Find and Verify the Best Tenants in 2022
Nathan Slafter
Husband, Father, Son || Founding Member - Conduit || Strategic Partnerships & Finance - Commissioned.io
The tenant screening of old employ antiquated techniques and biased methods to assess risk. Applicants are viewed as a credit score, an income statement, a history, but not as people. You are renting to a person, not a credit score.
The systematic issues that overlook the best tenants have plagued the rental process, now exacerbated by Covid. Moreover, most landlords lack the data-drive intelligence and advanced analytics to know a tenant's ability to pay so that they can make the best leasing decisions.
In 2022, your best tenants can be found by using better data and inclusive techniques—instant confidence in resident outcomes. Instead of a disjointed application and risk assessment process that, by design, overlooks underrepresented or marginalized groups, could you automate the process?
Further, what if there was a way to accurately understand a prospective tenant's "willingness to pay?"
A tenant's income and credit record do not accurately predict their willingness to pay. Alt-data, alt-FICO credit attributes, and AI provide inclusive, prescriptive, and predictive intelligence that reveals a tenant's priorities and character.
AI is overturning the industry and creating streamlined systems to determine lease risk.
AI-based Property Management Tools to Increase Productivity
AI-based property management tools increase productivity by completing mundane day-to-day tasks without human intervention. They remove the friction and risk from the application process, which leaves your schedule free for the more important tasks!
AI is the key to giving you a competitive edge. AI can take your company to the next level by automating workflows and driving leasing confidence. Advanced analytics help remove the traditional bias in the tenant screening process, broadening the applicant pool while minimizing risk.
Benefits of AI-based Property Management Tools
Ai-based property management tools are ideal for all, whether you have ten units or 1000! As a property manager, you have tons to get through each day. Allowing AI to complement your critical tenant placement activities can be your make-or-break solution!
Tenant Screening Processes
AI simplifies the tenant screening process, helping you lease to the best tenant for your property.
Imagine a procedure in which the pre-qualification questions also provide instant insight into the performance of the lease. Direct-from-source datasets automate the application process and remove fraud and friction from the process.
The AI tool then inclusively identifies, assesses, and segments tenant risk and searches transaction data and millions of database records to identify rent history.
A tenant may have a poor credit score or unconventional income. They may fall outside your typical criterium for the lease but are actually your best tenants. How could you ever know? The existing tools overlook millions of these renters. This renter may not have access to credit or capital to build their credit history. They may live debt-free, therefore marginal credit. They may have 3-gig-economy jobs and not fit within a traditional W2
AI, alt-FICO credit model, and data will uncover that renter with poor credit or unconventional income has the ability and willingness to pay. They should get the benefit of the doubt.
Inversely, a potential tenant may look great on paper, and you place them in a home only to find out they prefer eating out to paying rent!
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AI doesn't only consider the monetary factors but also behavioral factors! This allows a property manager to have a complete, inclusive risk assessment before speaking to a tenant.
Lowered Turnover Costs
Have you ever experienced a tenant skipping rent and packing up in the middle of the night?
AI is lowering your turnover costs by analyzing potential tenants' future behavior and probabilities to renew.
Do you really care about a credit score or an income statement? Wouldn't you rather know whether the applicant will pay their rent?
AI answers these questions. It allows you to reduce turnover times by broadening your applicant pool while reducing risk. By looking at attributes and characteristics of the best tenants, you can instantly identify more of the same...even low credit or unconventional income.
Lowered Risk of Default
Ai-based property management is proven to lower the risk of payment default and eviction!
Better tenant screening leads to reduced non-payment, fewer early lease terminations, and minimal skipped payments.
AI does precisely this by inclusively identifying an applicant's ability and willingness to pay rent! No more wasted time on tenants that do not pay.
Conclusion
Like a recipe, whatever you put in, is what you get out. If you put in antiquated techniques and insufficient data, you will get a mediocre rent roll and underperforming assets.
Imagine if you could know exactly how a resident will perform, how much confidence would you have in that lease? If you knew you could trust the resident to pay rent on time, could you give them the benefit of the doubt? You could overlook the inherent bias of credit scores and conventional income.
The best tenant is your greatest asset.
Do you want early access to our ALTERNATIVE FICO CREDIT SCORE tenant screening tool?
Nathan Slafter, CEO of Rente.AI