Property managers want tenants who will be excited about their lease offers. When you decide to extend a lease with a conditional offer, and the tenant declines, then what? What do you think that means? Blogger Ellen Calmas has some ideas to share.
By Ellen Calmas
It’s pretty obvious that occupancy drives revenue, and leasing (among other things) drives occupancy.
What’s less obvious is that there are times it makes more sense to let a prospective lease walk away.
Property owners and managers spend millions of dollars annually screening prospective residents to gain better insights into their ability to afford, retain and adhere to the specifications of a lease.
Screening results in a rejection, an acceptance without conditions, a conditional lease offer, or a lease offer with mandatory requirements.
The conditional and mandatory categories typically include safeguards for timely rent delivery and/or protection against future inability or unwillingness to pay rent on time.
Why property managers put safeguards in the lease
Herein lies the rub in that the prospective resident who agrees to extra conditions upfront – no matter how relatively easy or onerous – is typically the resident who wants to perform reliably. Yet sometimes things work out and other times they don’t. That’s why safeguards are tied to lease offers in the first place – to protect the property company.
So what’s the implication for property managers when a prospective resident declines a conditional or mandatory lease offer? A few options come to mind:
- The prospect can’t afford what’s being asked
- The prospect doesn’t want to move in with the lease offer terms
- The prospect doesn’t want pay rent on time
Pick any one of the above property managers and you’re better off letting that prospect walk away.
Yet with upwards of 35 percent to 45 percent of all lease acceptances falling into a conditional or mandatory category, it makes sense to have alternatives built into your lease offers to help protect a community’s bottom line that also contribute to increased leasing velocity.
NPS Rent Assurance does just that as an alternative to a higher security deposit that enables prospective residents to better afford move in costs while demonstrating their commitment to deliver rent reliably throughout the life of a lease.
Residents who enroll in our rent budgeting program linking rent to payroll tend to stay in their apartment homes over 550 days, or twice the industry average, so things work by design.
On the flip side, the prospect who walks away from a lease offer that includes rent budgeting flunks a secondary, less obvious layer of screening that illustrates either their financial insecurity or their future intention to fall down on their lease.
In other words, prospects typically enroll in our program unless they really don’t want to put structure in place to assure their rent will be paid on time – and that’s not a resident you want to move in.
Period. Full stop.
For more information on NPS Rent Assurance, download our recent whitepaper <https://www.npsrentassurance.com/resources>.
About the Author:
Ellen Calmas is co-founder and executive vice president of Neighborhood Pay Services, LLC / NPS Rent Assurance and brings 25+ years marketing communications experience with Fortune 500 and entrepreneurial companies to her role in strategic planning and marketing and sales support. She is also responsible for brand positioning, outbound marketing and digital networking as well as coordination of partner programs. Ellen has held senior management positions for marketing communications firms serving such clients as GlaxoWellcome, Bausch & Lomb, Avon Products, Heinz USA, AT&T, The House of Seagram, among others. She actively supports numerous health, civic and arts organizations throughout the Boston area and currently holds board positions for Silent Spring Institute, a leading research and advocacy group dedicated to identifying links between women’s health and the environment. She received her B.S. from the Roy H. Park School of Communications at Ithaca College. She can be reached at 617.209.3048 ext 104.