|
October 2008 Issue
RentGrow "In the Know"
There’s a popular myth that all resident screening services cost about the same, but the truth is they don’t.
Myth: All Resident Screening companies cost about the same.
Reality: Costs vary because the available services and delivery methods vary. When looking at total “cost” there are important factors to consider beyond “price.”
How Costs Differ:
Bundle pricing. Some screening providers offer a flat fee or bundle price that pulls all possible reports on each applicant, while others offer their services in an a la carte or tiered fashion. While it may seem appealing to have a flat rate, keep this in mind: 15-20% of applicants don’t meet the average management company’s credit screening criteria, making criminal and eviction searches unnecessary on those applicants. In other words, with the bundle model, you end up paying for a number of unnecessary reports and could have paid 1/3 of the price.
Hidden fees. Hidden fees may include annual or monthly fees, surcharges for accept/reject letters and extra charges for updating applicant information. The easiest way to prevent extra charges is by double checking invoices for unexpected fees. RentGrow provides a clear, itemized invoice so you know exactly what you’re paying for.
Look beyond price. Don’t look at the price of screening reports only. Instead, think about the costs of accepting the “wrong” applicants: bad debt, late rent payments, skips and evictions. When you add everything up, evicting a resident could cost $5,000-$8,000. This includes uncollected rent payments, lawyer fees, apartment damages and the cost and time to replace the resident. You have to accept a certain level of risk in this business, but it is critical to make your best effort to minimize your risk. There is no substitute for choosing a top-notch screening system from a partner who takes the time to advise you on your screening criteria and process. This is the best way to truly reduce the cost of resident screening!
“Bad Rep” Costs. In addition to the costs of accepting the “wrong” applicants, the cost of having a bad reputation is immeasurable. The reality is no one wants to live in an unsafe community. It’s in your best interest to have a solid screening practice in place, so that you develop the kind of reputation that attracts the best possible residents to your community.
While you may think that all resident screening companies cost the same, they don’t—and these differences in costs have a sizable impact on your bottom line.
So what can you do to rein in costs?
Choose a top-notch automated screening system that runs the reports in a logical order so that you don’t waste money on unnecessary reports. A top-notch screening system will allow you to customize the order in which the reports are run and can be programmed so your process is controlled, consistent and compliant for each applicant. Partner with a company that sends crystal clear invoices with no hidden or extra fees. To ensure cost-efficiency in your screening process make sure your prices are competitive and you’re not paying a low price on the front end while bearing larger costs on the back end in the form of unsafe communities, bad debt, skips and evictions.
If you don’t think you’re getting the most out of your resident screening service, contact RentGrow today for an evaluation.
© 2008, RentGrow, Inc., Resident Screening Experts. For permission to reprint this article or to sign up to receive "In the Know," send an email to newsletter@rentgrow.com.
If you have additional questions about other aspects of your resident screening strategy you can contact RentGrow at 1-800-RENTGROW (1-800-736-8476) or visit our website at http://www.rentgrow.com. | 
