As an operator, your job involves a careful balancing act. On the one hand, you need to provide profitability for the owners who bring you in to manage their portfolio; ensuring on-time collections, limited delinquencies, and minimal evictions. On the other hand, you need to maintain resident satisfaction and assist the on-site teams that engage with your residents on a daily basis.
While inflation remains high and the effects of economic instability and financial insecurity are prevalent throughout the real estate industry, the best thing you can bring to both your owners and your residents is renter satisfaction. When renters are happy with their property, they’re more likely to renew their lease, keeping buildings more profitable for longer. One surefire way to ensure renter satisfaction is with renter financial services, like rent reporting and access to rent relief.
As you look to propose only the right services to your partners, renter financial services can be a win-win for owners and residents who may be facing economic headwinds.
Demand for rent reporting is stronger than ever
Rent reporting is one of the most sought-after renter financial services. In a recent Fannie Mae survey, 80% of renters say they would want their on-time rent payments reflected on their credit reports.
Rent reporting gives renters a way to build or establish their credit score at no cost to them and without having to incur debt. Although credit scores are integral to the American financial system, renters are seven times more likely than homeowners to not have a credit score and more likely to feel the effects of financial insecurity.
Renters who are able to establish and improve their credit with positive rent reporting are more financially stable, and with more financial opportunities, are less likely to fall behind on rent. Additionally, renters who live in properties that offer rent reporting tend to be more satisfied with their property and are incentivized to pay on time. Bringing rent reporting to the owners you work with is a great way to offer a unique amenity that is also shown to support resident satisfaction.
When renters fall behind, don’t turn to eviction
It’s clear that the economic effects of the COVID pandemic are still affecting most Americans and their ability to stay ahead of their rent payments. In 2023, eviction filings were up 50% when compared to pre-pandemic levels.
Evictions are financially devastating to both families and property owners. For an owner, eviction costs (including lost rent, vacancy, legal fees, repairs, turnover, leasing, and other costs) can range between $2,500 and $8,000 per case, depending on location and circumstances.
Providing access to rent relief can be a powerful tool in stopping evictions before they start. Esusu’s rent relief is provided by the Stable Home Fund and offers 0% interest loans to renters, which are paid directly to property managers and immediately bring their accounts current.
As a result, Renters stay in their homes and are given leeway to get back on their feet financially, without exposing owners. Property owners see a reduction in bad debt and don’t incur the financial burden of eviction proceedings. In 2023, 81% of renters who accessed rent relief through Esusu and the Stable Home Fund continued to make rental payments.
Drive social impact backed by data
ESG (Environmental, Social, and Governance) strategies and data have become more important than ever for renters and owners. ESG, once thought to be a luxury, is now a top concern for nearly all public companies, with Deloitte projecting that 99% of public companies would invest in ESG to some extent in 2023. Meanwhile, a recent study from MRI Apartment Data showed that 61% of renters would be willing to pay more to live in an eco-friendly building.
Social impact can be notoriously difficult to track and implement but is a critical metric in today’s investors’ strategies. Renter financial services can help you bring social services to your residents that will directly impact their financial health and your owner’s bottom line.
Looking to find the right way to roll out these services during times of economic uncertainty? Our recommended approach is to test and then scale. Starting with a slow rollout of new services can be an ideal way to prove their value. Test out resident financial services like Esusu in a handful of pilot properties to show your owners what the real impact on their ROI will look like.
Want to learn more about integrating ESG strategies and increasing your social impact? Check out our guide Centering Social Impact in Your ESG Strategy.
