TransUnion Rental Screening Survey Finds 81 Percent of Property Managers Are Concerned About Locating Reliable Residents for the Remainder of 2009
Las Vegas, July 25, 2009 – A TransUnion survey of more than 870 property managers across the United States revealed that half of the respondents are experiencing more difficulty locating qualified renters as compared to last year. Another 81 percent of respondents are concerned that they will not find reliable residents for the remainder of the year. The survey, which was administered in early June 2009, is being released in conjunction with the National Apartment Association’s Education Conference & Exposition in Las Vegas.
“Our survey confirms that the recession has placed added pressure on property managers and that they will continue to face economic stress through at least the end of 2009,” said Mike Britti, group vice president of TransUnion’s rental screening group. “In this dynamic economy, it is important for property managers to look for efficiencies throughout their business processes while also locating the residents who will be both reliable and profitable.”
While 32 percent of respondents stated that vacancy rates are higher than the same period last year, 48 percent viewed it about the same and 20 percent have experienced lower vacancy. According to the United States Department of Commerce, the national rental vacancy rate at the end of the first quarter of 2008 was 10.1 percent.
As far as rental vacancies, property managers responded with the following:
- Fifty-seven percent of respondents had property vacancies of 5 percent or less
- Twenty-two percent of respondents had property vacancies of 6-10 percent
- Thirteen percent of respondents had property vacancies of 11-20 percent
- Six percent of respondents had property vacancies of 21 percent or higher
As a reference, U.S. Department of Commerce data shows national rental vacancy levels between approximately nine and 10 percent since 2003. During the end of the last recession in 2001, vacancies were 8.8 percent nationally.
When asked if they were seeing an increase in the number of applicants moving to rental units from foreclosed properties, the tally was almost evenly split with 51percent seeing a year-over-year increase. “While one would expect to see a more pronounced increase of applicants coming from foreclosures in this environment, a possible conclusion to draw is that many consumers coming from these circumstances are moving in with family members or friends to share expenses,” said Britti.
The importance of filling vacancies also was highlighted when the survey asked respondents to rank business objectives in the order of importance. Increasing occupancy was noted as the most important objective by 25 percent of respondents, followed closely by decreasing bad debt/losses with 24 percent. Another 18 percent of respondents said compliance with Fair Housing and Fair Credit laws was their primary objective.
“Though the survey reveals increased vacancy numbers in 2009, in a sign that the economy could potentially be changing for the better, 36 percent of respondents said they expected fewer vacancies at the same time next year with only 10 percent expecting more vacancies,” said Britti.
Other key points from survey include:
- Thirty-three percent of respondents said having access to income and employment information were the most important factors in screening prospective residents and making a decision.
- Approximately 28 percent of respondents said criminal/background checks were the most important consideration factors, followed by looking at credit history (22 percent).
- Rental history (10 percent) and personal references (8 percent) also were noted as important practices.
- Nearly nine in 10 respondents (87 percent) said identity theft prevention was important to their business.
“Identity theft is becoming a larger issue in all industries, and it is especially important to property managers as much damage could be done to a rental unit,” said Britti. “It was interesting to note that while 95 percent of respondents check credit reports; this statistic was followed by evictions at 72 percent and criminal statewide database searches with 61 percent. Property managers want to find renters who are not only financially responsible, but who also do not have past evictions or even criminal backgrounds.”
TransUnion provides rental screening solutions to large property management companies, independent landlords and criminal data resellers. By applying analytic scoring models to comprehensive credit and criminal background data, TransUnion provides property managers with screening tools to make faster, more well-informed leasing decisions. As a result, property managers can improve their resident profile to increase cash flow and decreased costs. For more information about the survey and TransUnion’s rental screening solutions, please visit
www.transunion.com/rentalscreening or Booth #1775 at the National Apartment Association’s Education Conference & Exposition in Las Vegas.