Los AngelesApartment ownerGoldcor Capital Partners has partnered withLeaseLock to roll out the company's Zero Depositproduct across its portfolio of Sunbelt state properties. Zerodeposit is a lease insurance program that eliminates securitydeposits and deposit alternatives, like surety bonds. Goldcor plansto roll the product out across its portfolio and for newacquisitions as well.

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"Like many apartment owners, we have seen an uptick infraudulent records from new move-ins that are brought to ourproperty management company," Nir Goldberg,managing partner at Goldcor, tells GlobeSt.com. "While ourunderwriting process is appropriate, we wanted an additional way toprotect against that. We have looked at other lease protectioncompanies in the past, however, those companies didn't yield theresults that we wanted."

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When looking for an insurance company, Goldcor found mostlysurety bonds. "On most other programs that we looked at, there hadto be a pool that the property had to build up to cover thedamages," says Goldberg. Many times when you are paying the amountsthat we looked at, it could take a number of good residents to payfor the damages of one bad tenant. This is quite different. Itallows you to take advantage of a larger platform and there is nopool that needs to be built up before you can recoup damages orlost rent.

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LeaseLock was an ideal partner for Goldcor because it is a trueinsurance program that doesn't require a reserve to operate."LeaseLock is a straight-forward and easy way to partner with acompany that allows us to participate in an insurance pool,"Goldberg says. "This is not a bond program where you build up fundsto address damages or bad debt, and the process of rolling this outto our onsite staff was easy and transparent."

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Renters under the LeaseLock program pay a $19 per month fee thatwill generate more than $5,000 in coverage for the property onevery lease. This creates clear benefits for both the renters, whowill have reduced up-front costs, and the landlords, who get realprotection from damages. "We rolled it out in our portfolio, and wehave already gotten a positive response from our leasing staff. Ourprospects are embracing the program, and the ongoing fee has notbeen a deterrent to leasing and has actually been more advantageousthan taking out up front deposits," says Goldberg.

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Goldberg expects future benefits as well, both in terms ofoccupancy and lease rates. "We would like to see closing ratiosincrease and occupancy increase because this is a function oftenants not having to layout large deposits up front," he says."Our team spends a lot of time convincing prospects into theirall-in rent, and it is easier to sell this as a fee in theirmonthly rent."

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.