Qualifing "Unqualified" Applicants

Qualifying “unqualified” applicants seems to be another avenue to gain renters these days. I recently commented on this practice that I would never choose to participate in such a program myself and my comment was finally met with, “Here’s my number. Call me.” Let me repeat, I will never choose to participate in this type of program for myself and would object to using it in my company.

There are two ways of ensuring that Applicants who don’t fully qualify due to being an international person with no established credit history, a citizen who lacks credit history and is most likely a first time renter, or someone who simply has bad credit. According to these new programs, one way is for the Applicant to agree to pay 10% of the total lease cost upfront as a kind of “insurance policy” and the other way is to agree to participate in another type of program where the Applicant agrees to have money automatically withdrawn from his/her paycheck, a kind of payroll deduction. In both scenarios, I was told that the Applicant has to meet the Resident Screening Criteria in every way, which I guess means in every way, other than the credit worthiness as defined by the company.

As Ellen Calmas wrote, “They voluntarily opt in to a lease offer as a way to be responsible in making sure their rent will be delivered on time and so that they can save additional money by not having to pay late fees that create a big expense throughout a lease. These are residents our clients value because of their willingness - once approved - to effectively budget their payroll so that their rent isn't late. They are both qualified by our clients' leasing/screening systems and moved-in because of their willingness prior to signing a lease to take extra steps tied to payroll to make sure they perform.’

She continues, “Our experience shows that asking a resident who is in the lower centime of credit to drain their savings in order to move in is asking for trouble in that they very likely won’t have funds to pay rent somewhere in their lease.”

While I understand the premise, I fail to see how someone with negative credit actually meets the usual Resident Selection Criteria for most companies. In addition, I wonder why I would want to approve an Applicant who I already suspect may have financial issues great enough to impact their ability to pay their rent on time? Additionally, I think the potential Applicant most likely to qualify for this program is an Applicant at a C property where the rent is usually lower than at a B+ or A property. In my experience, when someone coming to my conventional C property applies and has his application declined due to negative credit history, even when they do pay a higher security deposit, 62% very often default on the lease. Even those who may choose to participate in the type of “insurance” or payroll deduction program are often the very renters who frequently change jobs, lose jobs due to being fired or being laid off, and whose jobs may be temporary. Clearly, in order to participate in a payroll deduction program, the Applicant has to be working. Do they have to be employed for one year?

I just cannot imagine telling an Applicant that he does not qualify to live at the property on his own merits, but he may still be offered a lease when he agrees to pay 10% of the total lease value – up front – or, agree to have money for the rent deducted through a payroll participation program. As it was pointed out to me, the payroll deduction program is completely voluntary. However, to me, on a gut level, it does not feel voluntary. It feels like a garnishment. I would feel completely different if the program was presented as an optional pay method for all residents. However, to tell the Applicant he has to participate in order to sign a lease, seems punitive to me. Plus, there is no guarantee the person will not encounter issues if he becomes unemployed. It makes more sense to me to abide by the higher security deposit and/or co-signer requirement as an option.

Some people are not going to be financially qualified to live at our communities. If your Criteria automatically declines applicants with felony backgrounds, do you spend a lot of time worrying about it and trying to design and locate loopholes so they can qualify? Most likely, you do not.

Going the Distance

Why don’t people flush the toilet? And if they don’t flush the toilet, does that mean they also don’t wash their hands before exiting the restroom?

Why don’t people put their unwanted mail into the trash receptacle sitting right beside the bank of mailboxes instead of discarding it casually on the ground?

Why don’t people bother to scrape more than a small hole in the ice on their frosted over windshields in the middle of winter BEFORE they pull out of the driveway?

Why don’t people pick up their dog’s poop?

After reading so many blog posts recently about relationship selling and customer service, I am intrigued by the concept of why people do what they do. I have always been fascinated by this and perhaps missed my calling (except that in property management we all know putting on your shrink hat is commonplace. :-)) Coaching our teams is the first step in helping our residents to stop their laziness. That's what it is - simple laziness - when people so obviously ignore the right thing to do.

Flashback to high school. I was always a fairly proficient runner and enjoyed the short distance race. I excelled and often finished, if not first, then in the top three. One day after the spring season had already started my Coach told me he was pulling me from the short races and entering me in the long distance races. I protested. I whined that I wasn’t good at the long distances, that I would let the team down, that I plain ol’ didn’t want to run the long distances.

His response? I need you in the long distances, so that is where you will run. I was mad and pouted but did it. I never won the mile or even finished in the top three. However, by placing in the top five or even ten – heck, just for having someone competing – brought enough overall points to our team’s total to qualify us for Sectionals. My meager point count contributed to our total success and our ability to keep competing.

Flash forward to real life. At some point in our lives, we have to ask someone on our team to do something he or she does not want to do. If our residents continue to ignore the obvious, we may have to do it for them until we can train them to do it for themselves. Educating residents to do the right thing means we have learned what it takes to go the distance and we are up to the challenge.

And, I doubt we will ever get people to scrape their whole windshields before pulling out of the driveway. But I won't give up trying to convince them to take that little extra time so they can actually see where they are going and get there a bit more safely.