A Waltham, MA-based online tenant screening service is partnering with a specialized credit bureau to offer expanded services to property management companies. The company, RentGrow, plans to integrate data from Atlanta-based RentBureau with its TotalScreen system. TotalScreen is a Web-based resident screening tool for the conventional and affordable multifamily housing industries.
Four-year-old RentBureau describes itself as the first consumer reporting agency for the rental housing industry. Through the use of property management software, it collects rental payment histories every 24 hours from a network of property owners and managers serving nearly six million residents nationwide. It then sells the data “to appropriate parties for uses that adhere to Fair Credit Reporting Act” and other state and federal laws.
RentBureau said its objective is to help the multifamily industry reduce losses from risky tenants and help residents who pay in full and on time as agreed build their credit histories. Its “data delves deep into a prospective resident’s alternative credit data, including past rental history, allowing the property manager a more complete and accurate picture of the prospective renter,” the company notes.
Michael Lapsley, president & CEO of RentGrow, says adding RentBureau data to the TotalScreen product will make it easier for multifamily property managers to objectively evaluate prospective tenants.
RentGrow has been providing resident screening services and technologies to the multifamily industry since 1989. Its TotalScreen tool already offers multifamily property managers information on evictions, criminal and sex offender records, previous addresses and Social Security numbers. It can also classify applicants as minimal, elevated or serious credit risks based on their credit histories.
But credit reports from the Big Three providers–Experian, Equifax and TransUnion–generally do not include an applicant’s rent payment history. That’s a significant problem for the multifamily industry, says Eric Hartz, RentBureau president and CEO, since “the greatest predictor of a resident’s likelihood to pay rent is their rental payment history.”
The new partnership enables RentGrow to add RentBureau’s proprietary data to its tenant reports. It will “provide a clear-cut way of viewing rental history,” Lapsley says, “significantly reduce the risk of skips, bad checks, evictions, and property damage.”
Multifamily industry experts say interest in online tenant screening has grown with higher demand for rental housing. More people are renting because of the deteriorating housing market and more property owners–including homeowners who are unable to sell–are transforming their houses and condominiums to rental properties. Although the multifamily industry has benefited from an increase in rental applications, it has also increased the need for fast, efficient screening options.
Since it is easier for a property owner to find tenants than force existing ones to leave, the consensus is that landlords should look before they lease. Under federal law, property owners can legally access the credit reports of potential tenants and pass along reasonable processing fees as long as they have an on-site inspection, a publicly listed business telephone number and a business license.
Commercial real estate professionals describe credit checks as one of the most cost-effective expenditures landlords can make, potentially reducing property damage, improving long-term occupancy, decreasing late payments and even reducing the property owners’ liability for criminal activity.