Screen test: Integrated solution benefits multifamily managers

Fifteen to 20 years ago, assessing the risk of admitting a prospective resident into a multifamily community was not a particularly streamlined or comprehensive process. The primary source of applicant data was credit bureau reports. Screening companies had emerged to help bring consistency and structure to the process, but these services were delivered largely manually, with minimal automation. As time passed, however, property managers sought additional ways to maximize rental income with reliable renters, minimize risk, and comply with the Fair Housing Act and Department of Housing and Urban Development guidelines. Toward that end they sought to create a more complete, and therefore more accurate, risk assessment model. One barrier was a data infrastructure that was not sufficiently advanced to allow easy access to criminal and civil records. Eventually court networks and data aggregators developed systems and interfaces that made national registered sex offender lists, documents in the Treasury Department's Office of Foreign Assets Control, civil court eviction records, criminal court records, rental history records and other potential sources of information about prospective renters available to multifamily property managers. As one indication of criminal screening's growing importance, online resident screening service provider RentGrow Inc. reports that the portion of its clients that use criminal screening as a rental decision criterion has grown from 15% to 95% over the past 10 years. Within the last several years, as property management technology's state of the art evolved to encompass a "one-stop-shop" concept, comprehensive resident screening services have developed the capability to be fully integrated into a core property management and accounting system. This convergence was part of a growing trend among multifamily housing providers to reduce costs and increase efficiency by standardizing business-wide on a single technology platform, consolidating many ancillary processes and services, and minimizing the number of technology vendors. ALCO Management Inc., a Memphis, Tenn.-based apartment developer and manager with extensive HUD property experience, can attest to the benefits of integrated screening. "We benefit greatly from customizing decision criteria for each property, which helps enforce uniform screening standards. Our screening system provides a reliable, automated process, and being able to launch a credit check directly from our Yardi Voyager guest card workflow or from our marketing portal, without having to use a separate system, allows our leasing agents to work much more efficiently," said Michael Johnson, ALCO's executive vice president and chief administrative officer. Tarragon Property Services of Sumner, Wash., which manages multifamily, industrial and retail properties in Washington state and California, reports similar advantages. "We can do our applicant screening thoroughly yet quickly within Yardi Voyager, without needing a separate system. This helps reduce our risk in selecting residents," said Jim Wiard, regional manager for Tarragon Property Services' residential portfolio. The convergence of the screening process with the applicant workflow system enables the property manager to screen much more efficiently. Using new capabilities to apply consistent screening criteria that comply with the Fair Housing Act and other government requirements can ultimately help maximize revenue and reduce risk by ensuring that units are filled with reliable renters. Joel Nelson is with Yardi Systems, Inc., Santa Barbara, Calif.