From “Ability to Pay” to “Willingness to Pay”: AI-Based Tenant Screening is Boosting NOI

Tenant screening has traditionally been about digging up every available record about a prospective renter, then determining whether any risks of non-payment or bad behavior outweigh the benefit of filling an empty unit. But driven by RealPage’s new AI Screening, the discipline is beginning to take on a new look. That’s because a renter’s income and credit history don’t always correspond with the likelihood they’ll pay their rent. You’ll find the best predictor in their past behavior, not their credit history. Some people prioritize their rent payment ahead of their other expenses, and others don’t. A person strapped for a car payment or even food money might feel that having a place to live comes first. This is a renter you want. But with the old way of screening, you’d likely turn them away and lose a reliable rent payer. Something you can’t afford to do, particularly in uncertain times. The trick is: how on earth can you gauge a prospect’s willingness to pay? It’s all in the records The weighing of “willingness to pay” only became possible after RealPage had amassed enough rent transaction records to compile a rental history database on millions of renters and thousands of sites. Has the prospect paid their rent reliably in the past? RealPage was able to build a database of over 36 million lease outcomes into a screening system underpinned with artificial intelligence, in order to provide a better predictor of whether a prospective tenant would actually come up with rent money every month. RealPage AI Screening allows properties to more accurately adjust thresholds balancing risk with occupancy goals. Better tenant screening, $39 per unit savings RealPage recently announced the results of the first full year of AI Screening out in the field, and they are remarkable. AI Screening was proven to deliver an average savings of $39 per unit per year, pushing NOI higher by dramatical...