The institutional apartment industry has had a collective dream of instituting a completely virtual, touchless leasing process for years. Today, due to the nightmare of COVID-19, that dream actually may be coming true.
Multifamily operators facing the uncertainty of their second spring leasing season during the pandemic say that new technology tools—and perhaps more important, their adoption—have been the silver lining of the worldwide crisis.
“Before COVID, the apartment leasing process remained relatively unchanged for 30 years,” says Jamie Gorski, chief marketing officer at Boston-based GID, an operator of 37,000 units. “People would call, visit the leasing officer during business hours, and take a tour. But now proptech changes all that.”
Indeed, operators navigating the continued uncertainty of 2021 say online 3D floor plans, virtual and self-guided tours, smart home technology, and automated leasing are becoming a requirement for a touchless leasing experience—and to compete.
“In an industry that has been historically known for slow adoption of emerging technology and changes, adaptation of age-old practices is becoming our new normal,” says Amy Chien, director of strategic innovations at Des Moines, Iowa-based BH Management, which operates 90,000 units. “It’s very refreshing.”
It also could be perilous for those who ignore it.
“If you have your head in the sand on technology today, you’re handicapping yourself for the spring 2021 leasing season,” says Dave Marcinkowski, partner at Lubbock, Texas-based Madera Residential, which operates 15,000 units. “24/7 leasing, digital humans, and self shows are available right now, and it’s likely your competition is using them.”
Pros say navigating 2021’s leasing push starts, as usual, at the advertising level.
“Having a strategic digital advertising strategy to reach renters during their search process remains as important as it was pre-pandemic,” says Johnny De La Espriella, senior vice president at Charlotte, North Carolina-based RKW Residential, whose portfolio includes 23,000 units. “But how we position and manage our online presence is more important than ever. It may be the only thing the prospect sees before making a leasing decision.”
Operators say putting your best digital foot forward starts even before any virtual tours are booked.
“It’s imperative that each floor plan has an attractive 3D tour attached to it, so prospects can get that in-person view of the apartment, without having to be there,” says Jenny Donnellon, senior vice president of rental operations at the Westerville, Ohio-based Champion Cos., which runs 4,643 units. “Click-and-drag tours give them a realistic sense of the unit. By the time they get to a video or self-guided tour, it’s really just a way to verify what they already know before submitting an application.”
Taking those applications online is a must as well.
“DocuSign for digital leasing and renewals makes the process easy and contactless,” says Donnellon. “Smart home technology like smart door locks allows for a contactless experience because you can provide new move-in door codes, rather than having to physically hand them keys.”
However, operators also have a word of caution as the formerly in-person process moves almost completely online. A wave of application fraud has hit apartment companies across the country.
“We’ve really been surprised at the number of fraudulent rental applications at our properties,” says Madera’s Marcinkowski. “About 15% of all prospects coming in the door will misrepresent themselves to us.”
The rise could be due to the harder circumstances the pandemic has put on everyone, including less stable employment prospects.
“Before last year, we would have one to seven instances of fraud per quarter, now it is one per week,” says Diana Pittro, executive vice president at Chicago-based RMK Management Corp., which oversees 6,300 units. “As unemployment decreases, we hope it slows down.”
Operators are turning to screening tools such as CheckPoint ID, PreciseID, and others. But they also note increasingly sophisticated fake IDs and pay stubs, especially those created online, create an even harder challenge. “Those are really hard to catch,” Pittro says.
Of course, just as before the pandemic, operators say keeping your existing residents is the first line of leasing defense. That’s become even more important now. Industry experts say they are offering no- or low-increase renewal leases and making it easy for residents to stay by streamlining online renewals. But, here, they also strike a chord of caution.
“We have updated our policy to look at any renewals like a brand-new lease,” says Rahim Amidi, CEO of the Los Angeles-based Amidi Group, which operates around 700 units. “We do detailed credit and background checks, because the pandemic could have potentially impacted someone in ways that did not exist previously.”
By putting your best digital foot forward, giving prospects and residents the virtual choices they want to make a leasing decision, and keeping new and renewal leasing standards uniform across the board, multifamily operators can navigate the uncertainty of 2021’s spring leasing season.