In just a few short years, the Internet has revolutionized the way Americans rent apartments. Today, thousands of renters are using apartment locating services, viewing photos of apartment communities before they schedule visits, calling up maps and directions to properties and even undertaking virtual tours of prospective apartments — all on the Net.
But as new companies are demonstrating, the potential of the Internet has only begun to be tapped. In the last year and a half, several startups have come online with the goal of helping make renters’ lives easier. Whether eliminating the need for security deposits, developing a means for properties to seek out prospective renters or making the credit approval process faster and fairer, they’ve demonstrated that the future of renting is undeniably linked to the Internet.
DepositSaver.com
A service of Irvine, Calif.-based Predictive Data Inc., DepositSaver.com offers property managers a commercial insurance policy covering loss of rental income or damage to their units. That in turn allows them to offer renters the choice of paying a security deposit upfront or paying a small monthly fee to cover the insurance on that unit.
The insurance underwriting is done on the property management company and the community itself, as well as on the renter. Such factors as the security deposit cost, the renter’s credit history, presence of kids or pets, and the renter’s status as a smoker or non-smoker are all taken into account in underwriting the policy, and help determine the monthly fee. For the average renter, eliminating a $1,000 security deposit would cost about $14 a month.
Using the online service makes a lot of sense, said Predictive Data executive vice president of marketing Mark DiCamillo. He says a security deposit on a $700 to $800 a month apartment represents what average households with annual incomes of $35,000 typically save over the entire course of a year. Avoiding such a charge frees up cash for other expenditures.
In addition, DiCamillo said, when renters move from one apartment to the next, there’s generally a period of about 21 days between the time they have to put down their new security deposits and the time they are reimbursed their old deposits. With DepositSaver.com, they don’t have to worry about how to come up with the new deposit before they get the old one.
Who uses DepositSaver.com? Among others, renters who are cash poor, as well as those who have cash on hand, but envision a near-term big-ticket purchase.
Introduced at the National Apartment Association meeting in Chicago last summer, DepositSaver.com is currently offered in 17 states, including Illinois. DiCamillo estimates it will be available in 30 states by year-end.
Viva.com
Apartment locating services have existed for some time on the Web. But before Santa Monica, Calif.-based Viva.com, no service had permitted renters to spread the word that they’re looking for an apartment, then sit back and wait as rental properties come to them, rather than vice versa. Though not yet covering Chicago-area properties, expectations are that the service will be in Chicago by year-end. And renters moving to the six markets currently served — Houston, Dallas, Austin, Phoenix, Las Vegas and Denver — can use Viva.com now.
When renters register with Viva.com, they specify such preferences as location, number of bedrooms, desired rent range, preference for renting an apartment, house or condominium, and preference for apartment community features ranging from pools to covered parking.
They also check off the in-unit qualities they prefer, from fireplaces to ceiling fans and in-unit washers and dryers. They then pick the top five priorities overall from the lists of both the community and in-unit features. “With that information in hand, our technology goes to work,” said
The Viva Group’s CEO and co-founder Scott Ingraham.
Properties matching what renters are seeking are invited to make offers to the renters. “The renters then can do quick comparison shopping while sitting in their offices or homes, and can schedule appointments to see the apartments,” Ingraham said.
The average renter receives about 15 offers through Viva.com, with that number likely to grow as the site becomes better established. Most renters narrow those offers to two or three before visiting apartments in person, and already know a lot about the finalists before they arrive. “When they go to the property, they’re not going to be surprised,” Ingraham said.
In addition to saving them time and providing greater convenience, Viva.com offers renters other benefits. The information communicated in the offers from rental properties tends to be much fresher than the information in typical listings, and often is updated just before the offer is made, said Ingraham. And currently, renters who find their apartments through Viva.com are receiving $100 cash bonuses from the service when they sign their leases.
Abby Bearden, a Denver-area property manager for Sares/Regis Group, which owns seven properties in Colorado, signed her community on to the service in early May, and has since attracted her first resident through Viva.com. “It was great,” she said. “I e-mailed him an offer. Their Web site is very easy-to-use and simple.”
Viva.com plans to add Atlanta, Miami, Tampa, Orlando, Jacksonville, San Antonio, Tucson and Sacramento to its list of markets by Sept. 1, and hopes to be in New York City, Los Angeles, San Francisco, Boston as well as Chicago by year-end. The goal is to represent the top 50 markets in the U.S. by the end of March 2001.
“Viva.com is trying to create the first true digital marketplace in the rental housing industry,” Ingraham said. “At Viva.com, there’s a true interactivity between the parties.”
SafeRent.com
When an individual applies to rent an apartment, the typical credit approval process takes up to two or three days, and can be tainted by the subjective interpretation of the leasing agent. SafeRent.com eliminates the wait, and also removes any biases that may appear.
Online since April of 1999, SafeRent.com now handles up to 1,500 transactions a day, said Geoff Kulesa, vice president of marketing for Denver-based SafeRent, Inc., which operates the site.
Here’s how it works: When a leasing agent meets with an applicant, the agent logs on to SafeRent.com and provides the applicant’s Social Security number, income and the ZIP code of his most recent address. The agent then selects a credit reporting agency nearest the resident’s last address.
The information generated can confirm whether the applicant is indeed the holder of that Social Security number. The system then asks for the rental amount, the length of the lease and the amount of the security deposit. Within 30 seconds, SafeRent.com generates a score based on a 1,000-point scale. If the applicant receives an 860, for instance, that means that of 1,000 renters with similar characteristics, 860 would pay rent on time and not leave owing money. A score of 950 would be excellent, one of 650 or 700 “not so hot,” Kulesa said.
Based on that score, the agent can accept or decline the applicant on the spot, or can accept him with conditions, such as payment of an extra month’s rent.
The benefits of SafeRent.com to renters can be summed up in two words: fast and fair. “It’s fast because approval is in seconds rather than two or three days,” Kulesa said. “And it’s fair compared to the old method, which is `rule of thumb.’ That’s subject to human judgment, which means the applicant is vulnerable to bias, error and inconsistencies. With SafeRent, the same applicant is measured the same way each time.”
