Sometimes the worst tenants have the best credit. Now landlords can use a Web site to help reduce their own risk.
The Fourth Annual Inc Web Awards: Killer Apps
Company: SafeRent, in Denver URL:www.saferent.com What we liked: The technology lops days off and eases what used to be a lengthy, painful, and often subjective decision-making process
The only thing as stressful as waiting for a doctor's call is waiting for a call from a potential landlord. Would-be renters fret for days about whether they'll snag that desirable roof, while apartment owners try to calculate the likelihood that some young applicant attired in a nice suit will skip out, leaving the joint looking like Marilyn Manson stayed there.
Or both parties can get an answer in minutes. That's the promise of SafeRent, which in four years has screened applications for more than a million apartments in every state except North Dakota. The $12-million company offers landlords and property managers access to the usual renter credit reports and eviction histories. But it also applies a proprietary statistical model, developed at Harvard University, which takes such data as an applicant's income and credit history, combines it with information about the lease, and compares all that with a database of more than 100,000 anonymous renter histories. Based on the income, debt, and bill-paying patterns in those histories, the model calculates a score that is used to predict whether this particular rental agreement "will end happily for the landlord," says Linda Bush, SafeRent's CEO and one of its founders. In other words, SafeRent knows whether comparable kids in suits renting comparable apartments have generally paid up on time.
SafeRent's customers own or manage, on average, 5,000 rental units and pay $7.95 to $14.95 per search. They use SafeRent's Web site to create profiles of their properties (how old they are, how much they rent for) and to set a level of risk that they find comfortable. (Usually, the more upscale the property, the lower the acceptable risk.) When an applicant comes calling, the landlord or property manager plugs in rental and deposit amounts and enters the applicant's name, address, Social Security number, and income information into the site, and within 30 seconds, the system returns a recommendation: accept, decline, or accept with conditions such as an additional deposit. Landlords and property managers, in turn, feed rental histories from their own properties back into SafeRent's database, increasing the size of the sample against which to compare new applicants.
"It helps the landlords cut down significantly on bad debt," says Bush. "But it also helps renters. There used to be a series of hoops to jump through. They don't make three times the rent, so they're out. They make three times the rent but they've been 30 days late twice, so they're out. We evaluate all the information together, and we put it in perspective. We're helping responsible consumers get a place to live."