Resident Screening: The Lost Art of the Reference Check

The Unique Value of Reference Checks

Here’s the scenario:  John Smith just applied to live at your property. Fantastic! Time to decide if you want John as a resident. You’ve got two fundamental questions:

1. Does John pay his rent?

2. Does John treat properties & communities with respect?

By now, your screening software has informed you that John pays his credit card bills and has no criminal record. That’s a great sign, but you still haven’t answered your questions. You run John through an ID verification, income, and eviction tool. Looks like this is the real John Smith and he may have the cash to pay rent. No final eviction judgements have been made against him in court. Your screening process requires a decision, but you still haven’t answered your question: does John pay his rent?

Tips for a Successful Reference Check

Fortunately for you, there’s somebody out there that can tell you whether John pays his rent! Other landlords have this information and they are willing to share it with you, but only if you’re willing to make the effort. Statistically speaking, these efforts are well worth it; renters with prior rental debt have a default rate 4x higher than applicants with positive rent history. However, chasing down a reference check can be time consuming, often unsuccessful, and prone to fraud. Here are a few tips to maximize your chances of a quick, successful reference check:

1. Be persistent. On average, we’ve found that a successful reference check requires 6-8 communication touchpoints. Very rarely can you get to the data you need with a phone call and voicemail. If you want references on more than 10% of your applications, it will require more effort than you think. Iterate your way to a process that works for you and your team. We have success rates around 85%, and you can get there too!

2. Remove friction. Make sure your reference form is thoughtful and succinct! The fewer clicks, fields, steps, or words, the better. Every barrier to providing a reference (even something as trivial as an extra click) WILL result in fewer successful references and longer turnaround times.

3. Support omni-channel communications. You may be contacting landlords or property managers. These may be massive institutions or mom-and-pop operations. They may use cell phones or labyrinthine phone directories. They may prefer a two-minute phone call or they may prefer a short online form. The takeaway: be flexible! Get in contact with folks in the way that they’re most accessible, and support the information formats that work best for them.

Fraud Prevention Tool

You’ve got a great property, and people want to live in it—even people that don’t pay their rent. Unfortunately, you can’t trust everything you find on the internet, and your references are no exception. You are susceptible to fraud at every stage of the reference process.

Did John actually live where he says he lived? Is this the right contact information for the owner or manager of this property? Is this person on the phone who they say they are? Where was this online form just submitted from?

There are a bunch of valuable data sets out there to help you answer these questions. With the right process and the right data, you can mitigate the vast majority of these fraud vectors. However, no process is 100% immune to bad actors (including the rest of your screening process). Fortunately, our data shows that the right process can still catch or deter an enormous amount of first-party fraud. To date, we’ve saved our customers hundreds of thousands of dollars in bad debt using our rent data and reference checks!

Conclusion

Reference checks aren’t easy. We’d love to help you with yours! Using Trigo, you can submit a prospect with the click of a button. Your time is better spent driving more revenue for your business. Let us tell you if John pays his rent.