Are Any Landlords Aware of A Better Way To ...

Are Any Landlords Aware of A Better Way To ...

Investor · Wilsonville, OR · Member since 2014 · 59 posts · 51 votes

Hello All - I am wondering if any Landlords are aware of a more economical way for potential tenants to make application to several rental units, owned or managed by different entities, without having to pay multiple application fees?

I am an owner/landlord of several properties in a market which has been experiencing between 1-2% vacancies for a few years now.  My application fee ($40.00) is typical of the area, and in my case at least, is used entirely to cover the cost of running credit/criminal/eviction reports.  This amount is reasonable if a tenant only has to apply to one rental before being accepted, but it can become burdensome quickly to renters in our area who routinely apply to several units before being accepted.  As a landlord I simply want thorough and up to date screening information (credit/criminal/eviction).   I can envision a service which offers those screenings reports for a a one time fee and assigns the tenant an access code which can be used by several different landlords over a set period of time (say 90 days), or for a certain number of updated inquiries.  Of course, the tenant would still have to fill out the individual landlord's application and give written permission for access to the reports.

1.   Does this service, or something similar already exist?

2.   Would you, as a landlord, have any objections to using it if it did.

3.   Do others see this need in their markets?

4.   Do you "make" money from your application fee above and beyond the cost of your hard screening reports?  For example, is part of your fee used to cover administrative cost of checking references?

Thanks!  

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Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes
11y

@Marcia Maynard

I took a quick look, it is still in beta and not all details are ironed out yet but some quick impressions...

It shifts the cost of application from the renters to the property managers and owners.  For example, the renter pays a $35 application fee to the site, gets screened, and then the service issues a $35 credit voucher to be applied to the rent which essentially means the landlords who end up taking the applicant eats the cost.  On top of this, there is a $99 - $249 - $399 PER MONTH fee (depending on the property size) the landlords pay to advertise on the site.  Now the way I do it today I already pay the app fee - I credit the app fee to the first month's rent when the lease is signed.  I do this to discourage people from applying unless they are seriously interested if they failed screening or if they walk away then they lose app fee.  On the monthly fee I don't see paying it to advertise when there are free sites like Postlets and CL that reach far and wide.

The one advantage it claims to have is that each landlord's unique renter criteria is being stored on their database so that the applicants can be "pre-approved" before the showing.  This is useful.  I wonder how extensive that is.  Certainly it helps and I have posted in the past I wish Postlets and others can have custom built-in "questionaires" that landlords can extend in the ad to ask potential applicants such as "Is your gross monthly income at least X?", "Have you ever filed for bankruptcy?", "Have you ever defaulted on a lease?", "Do people generally think of you as a jerk?", "Have you ever peed outside the toilet since you were 5 years old?" etc...and I suppose this site will allow you to have additional screening criteria and it would be nice to see how extensive it is and whether it can be customized.  Now the renter would be screened against those criteria and be "PRE-APPROVED", I am curious what pre-approved means, does it mean the landlords are obligated to accept the applicant if the applicant passes the established screening criteria?  Can I still reject if I don't get a good vibe after meeting or am I looking at a potential law suit?

I didn't create an account to look deeper but I see this as another tool.  The additional monthly fee to advertise seems steep though.

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  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    11y

    I believe there is something similar to this. I have had several tenants show me a credit report on their phone from a company that I cannot remember the name of at the moment.

    We prefer to run my own background check & charge the application fee to cover the background check & the cost of our time. 

  • Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes
    11y

    "but it can become burdensome quickly to renters in our area who routinely apply to several units before being accepted."

    I guess I am not following this.  Are you saying most renters in this area are marginal tenants and expect to run through multiple applications before finding a more flexible landlord?

    As a landlord I rarely run into anyone that fails the background credit criminal eviction checks.  I state up front the minimum requirements, I talk to them and made sure they passed, I let them know the application form when filled in and submitted is binded into the lease...by the time they submit the application it's mostly a verification step.  The only way it would fail is they lied on the application form, or their employer or previous landlord offered "new" surprising information.

    Or are you saying an applicant would submit multiple applications at the same time to multiple properties like how a high school student applies for multiple universities?  If that's the case I do not think a landlord should encourage that by finding a cheaper way to do that.

  • Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    11y

    @Shawn Davis

    Some REIA groups provide credit reports at a discount for members. One of the ones I belong to charges $9 for a credit check, so may be you can reduce you costs and make your application fee more competitive to the others in your area.

    Around here about half have a fee and half do not.  For the one that have a fee I've seen as low as $10 and as high as $75. hth

  • Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
    11y

    My property manager, I believe, charges one application fee that can be used on any vacant property they have in their inventory, but only theirs (they manage quite a few, including several apartment complexes in addition to single family investors).  That makes more sense to me, I think, than a central service other landlords agree to use, as you know if they pay the fee, they are likely to rent one of their units rather than someone elses.  For the ones I handle on my own, one state limits the use of application fees to actual costs and you must return any amount not used by you if you deny the application, so might work there.  But I still don't like the idea.  While I don't make any money on the application process, it would greatly disturb things having the tenant be able to apply for 10 different places at once for one fee.  I'd rather them be serious enough about taking my rental to pay my fee and wait for my decision, likely signing the lease if approved than be able to apply for many different ones, have us all waste our time approving them when they may not be serious about actually renting from us.    

  • Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
    11y

    Recent article in the Rental Housing Journal for the metro area of Portland/Vancouver talked about this. For low income renters the cost of application fees is a real barrier to housing. Especially when there are unscrupulous landlords who take application fees even when they know the applicant won't meet their rental criteria and will be denied. Check out https://www.noappfee.com/ Tyrone Poole started the movement in Portland and hopes it will spread nationwide.

  • Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
    11y

    @Shawn Davis, @James Wise, @Sam Leon, @David Krulac, @Lynn McGeein  Please read my post... I'm a late comer on this thread. :-)

  • Investor · PA · Member since 2013 · 1k+ posts · 602 votes
    11y

    You could have them pull their own credit report for free from creditkarma.com.  You can figure out their rental history from public records using beenverified.com and/or your local court websites.

    I usually just do the latter; If they don't have any rental judgments or a criminal record then that is usually a good sign and if they do then you might want to think twice.

  • Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
    11y

    Just tried it, but my browser security denied it saying tested site and found security risks.

  • Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes
    11y

    @Marcia Maynard

    I took a quick look, it is still in beta and not all details are ironed out yet but some quick impressions...

    It shifts the cost of application from the renters to the property managers and owners.  For example, the renter pays a $35 application fee to the site, gets screened, and then the service issues a $35 credit voucher to be applied to the rent which essentially means the landlords who end up taking the applicant eats the cost.  On top of this, there is a $99 - $249 - $399 PER MONTH fee (depending on the property size) the landlords pay to advertise on the site.  Now the way I do it today I already pay the app fee - I credit the app fee to the first month's rent when the lease is signed.  I do this to discourage people from applying unless they are seriously interested if they failed screening or if they walk away then they lose app fee.  On the monthly fee I don't see paying it to advertise when there are free sites like Postlets and CL that reach far and wide.

    The one advantage it claims to have is that each landlord's unique renter criteria is being stored on their database so that the applicants can be "pre-approved" before the showing.  This is useful.  I wonder how extensive that is.  Certainly it helps and I have posted in the past I wish Postlets and others can have custom built-in "questionaires" that landlords can extend in the ad to ask potential applicants such as "Is your gross monthly income at least X?", "Have you ever filed for bankruptcy?", "Have you ever defaulted on a lease?", "Do people generally think of you as a jerk?", "Have you ever peed outside the toilet since you were 5 years old?" etc...and I suppose this site will allow you to have additional screening criteria and it would be nice to see how extensive it is and whether it can be customized.  Now the renter would be screened against those criteria and be "PRE-APPROVED", I am curious what pre-approved means, does it mean the landlords are obligated to accept the applicant if the applicant passes the established screening criteria?  Can I still reject if I don't get a good vibe after meeting or am I looking at a potential law suit?

    I didn't create an account to look deeper but I see this as another tool.  The additional monthly fee to advertise seems steep though.

  • Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    11y
    Originally posted by @Jassem A.:

    You could have them pull their own credit report for free from creditkarma.com.  You can figure out their rental history from public records using beenverified.com and/or your local court websites.

    I usually just do the latter; If they don't have any rental judgments or a criminal record then that is usually a good sign and if they do then you might want to think twice.

    So what does beenverified state with regard to use of their data and compliance with the FCRA?

  • Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    11y

    I'm in agreement with @Sam Leon- in most markets, the tenants filling out multiple simultaneous applications will usually be the marginal ones and know they will get more rejections so they put in a bunch of applications hoping to get one approval. They would do better by finding a sucker  landlord who does no screening whatsoever. 

  • Investor · PA · Member since 2013 · 1k+ posts · 602 votes
    11y

    @Steve Babiak

    Beenverfied doesn't report credit anyway but it does usually tell you an individual's criminal record and whether they have rental judgments  (which is all available publicly anyway, although the public records available on the court websites are usually more up to date).  The advantage is that beenverified requires less clicks/hassle to get the pertinent information to make a decision more quickly.  I don't really care much if a person can't or doesn't want to pay their credit card or hospital bill as long as they have a good history of paying their rent.

  • Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
    11y
    Originally posted by @Jassem A.:

    @Steve Babiak

    Beenverfied doesn't report credit anyway but it does usually tell you an individual's criminal record and whether they have rental judgments  (which is all available publicly anyway, although the public records available on the court websites are usually more up to date).  The advantage is that beenverified requires less clicks/hassle to get the pertinent information to make a decision more quickly.  I don't really care much if a person can't or doesn't want to pay their credit card or hospital bill as long as they have a good history of paying their rent.

     You do know there are a lot of potential applicants out there that agreed to move out quietly, cash for keys or other agreements, so even though they did not pay, they do not have evictions or judgments against them that would show up.   And calling old landlords is also not foolproof as, even if it is actually the real landlord, many will tell you they are fine just to get rid of them.  While I understand many people do rent to those with poor credit, to me poor credit is a huge red flag and not worth the risk.  I have worked with a few who have had a late payment or two on a student loan or something minor, but knowing they pay their bills on time is a huge factor for me.   

  • Investor · PA · Member since 2013 · 1k+ posts · 602 votes
    11y

    @Lynn McGeein

    I will agree that a tenant with good credit is better and playing the waiting game is a better strategy for many property owners, especially for properties in high demand.

    For those who own property in less desirable areas where the applicant pool is smaller or in situations where paying the mortgage without collecting rent would put the owner in a bad financial position, I think simply checking for judgments and criminal records is good enough.

    Of course I'm willing to accept a higher degree of risk than most property owners because my costs are lower due to the fact that I process my own evictions and many times do the clean-outs/repairs myself.

    I've learned that it is good idea to at least check for non-existence of rental judgments because that is a sign that either they will leave the property when asked or that they've never rented a property before in their own name because they are young.

  • Beaverton, OR · Member since 2015 · 1 post · 1 vote
    11y

    @Sam Leon @Shawn Davis @Marcia Maynard

    Hello,

    I am the founder and CEO of Noappfee.com. I was invited to the site today by Marcia who found an article of about the new rental platform. To answer your question Shawn, there is no system or company that allows a prospective tenant to apply to multiple properties with a single background check. This is because it is Illegal. Credit reporting agencies like TransUnion, Equifax, and Experian do not allow their reports to have more than ONE end user. They make a ton of money off selling data. They will close any company that attempts to resell the report to multiple users. The have a term for it that I can't remember at the moment but basically says by doing this you are attempting to be a Credit Bureau and take their profits. 

    Noappfee.com is a way to streamline the rental process saving lots of time and money for both the tenants and the landlords. We only have 1 end user, but we still allow unlimited applications... This is how; when you create an account on Noappfee.com we pull your background check. When you click search on any county in any state it filters your background check against every single vacancy in that county. Giving you a list of properties you QUALIFY for. We even list them in order of amenity matches. So the top property on the search results says "You meet this properties criteria and this property meets 16 out of 18 of your preferences." You can check your approval status on UNLIMITED properties. You can only get approved to 1. If you get approved and change your mind, you pay again to search... I have to do this to stay compliant.

    We match any property managers screening criteria EXACTLY as the current screening company. We have to because of Fair Housing Rules (If you have a single unit that two different people applied to and received different results because of different application methods even though they have identical background checks, that is a fair housing violation). A approval on Noappfee.com is exactly the same as an approval with their current screening company. We filter there data, but its on the property to verify its true... I.E. A tenant claims they make 3k monthly and 1k is from child support from the absent party. They may qualify for your property on the site, but when you view the uploaded documents and see that he pays occasionally, and misses to or 3 months at a time, you can still select deny. Even though the sites recommendation was approved.

    The site is now and will forever be 100% for properties and tenants. Their is a feature called the "Reverse Search Engine" that allows properties for the first time to SEARCH tenants! It brings up a list of every tenant that meets your requirements, a list of ones that are approved with conditions, and ones that do not meet. You can view all attached documents and actually send them a Pre-Approval that goes to their email and post on their FB page. I was talked into charging for the site because of the new abilities that are not found anywhere else. I changed the model to a paying site, but have recently changed it back. Some pricing graphics just need to be removed. Which will be done by this Friday.

    I was homeless and worked as a family advocate after getting back on my feet for 9 years between YWCA and Amazing Grace. The most stressful job you can have in the world is working with homeless stressed out people. But now, I am releasing a tool that is so powerful, when they walk in the door and are assigned to an advocate like myself, I write them an award letter stating I will pay rent for 1 year, then they get onto a platform that draws them a road map of every property that will except them and they get the keys the same day. Our mission statement; "Our goal is match even the most challenging renters to a home for which they qualify within 24 hours of creating an account." We went live after 2 years of development 3/21/2015 and have signed up 6 companies so far.

  • Michele FischerPro Member
    Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
    11y

    We do not charge application fees, we want the largest possible applicant pool to choose from.  Our direct cost is $20 per adult, plus our own time.  We sent $550 out of pocket last year, $250 the year before.  We don't pay the $20 unless they score high enough on our initial scoring of the application and we've had a chance to call prior landlords and employers and they seem to have potential.

    As far as relying on data someone else has pulled, I would be open to that if we can log on to get it, not accept paperwork directly from the applicant, where it could be tampered with.  It's an interesting issue to follow.

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