Are Landlords Ready For The Realities Of Online Leasing?
Pandemic or not, renters are itching to move.
According to a recent survey from Kingsley Associates and Apartments.com, 40% of renters plan to move in the next six months, and 23% of those renters did not plan to move before the pandemic.
While the general wisdom is that no one will sign a lease sight unseen, renter sentiment seems to be shifting. Kingsley found that 53% of renters have toured an apartment community virtually, and 63% of renters reported that a virtual tour with a leasing agent would be enough to make a leasing decision. Apartment hunters are readily adapting to the fully online model.
While renters might be ready for a fully digital leasing process, many landlords aren’t. Smaller, independent owners who manage fewer than 50 units may lack the tools to send and receive applications, provide virtual tours, screen applicants or generate and sign leases online.
“There have been solutions available for each step in the process, but it’s always been up to the landlords themselves to piece it together,” said Dan Russotto, vice president of product at Apartments.com. “It’s typically ‘Let me Google a lease that might work,’ and ‘Here’s an application I found online, print it out and scan it back to me.’”
In response to the overwhelming digital deficit, Russotto and his team have launched a suite of online rental tools that integrate with the Apartments.com platform. While large landlords are only able to access these tools if they operate out of select cities, any independent landlord with fewer than 50 units can access the tools nationwide.
Russotto expects that the rental manager platform will likely be put to good use sooner rather than later. After a brief dip in searches through March, total searches on Apartments.com were 40% higher in May than in any previous month in the site’s history. Meanwhile, conversions stayed steady compared with previous years, Russotto said, meaning that thousands more leases are being signed than in a typical year.
Of the searches on Apartments.com, 37% were out-of-market, like a user living in one metropolitan area searching for space in another. Examining out-of-market searches reveals a few illuminating trends.
Since the coronavirus pandemic set in, residents of the nation’s largest cities have been searching at higher rates for space in smaller, secondary cities like Austin, Nashville and Charlotte. Users who live close to central business districts are also looking farther outside their current markets to more spacious neighborhoods.
Renters may want to move across town or across the country, but with elective travel out of the question for many renters, landlords may have to rely on digital tools from the beginning to the end of the leasing process to encourage these renters to actually close the deal.
“It’s hugely beneficial for these mid-market landlords to have access to all the digital tools they need, all in one place,” Russotto said. “But it’s also just as important for the renters who can’t go visit these apartments in person.”
According to Russotto, requests from prospective tenants for in-person visits have dropped by about 40%, but requests for virtual tours have spiked by 140%. During quarantine, apartment hunters are taking virtual tours at three times normal rates, while requests for videos have risen 31%.
To give renters a better sense of where they are going to live even if they can’t go visit, the Apartments.com tools include 3D tours, virtual renderings and platforms for leasing agents, landlords and tenants to host video calls. Together, they can explore the property in real time, so future residents can see properties in detail and ask questions.
Working through an online platform from a trusted brand may also help with one of the more sensitive parts of leasing: background and credit checks. In a typical screening process, an independent landlord would ask a prospective renter to type in personal information and history into a third-party portal, which can be uncomfortable.
By integrating the screening process directly into the Apartments.com site, Russotto said he is hoping he can inspire more trust between renters and landlords.
Though online leasing platforms have existed for years, Russotto said, they have often left quite a bit of work up to landlords. For instance, some platforms may ask landlords to upload their preferred lease, leaving them to scrounge around the internet for a PDF that would suit the nuances of local laws and regulations.
Russotto’s team sat down with groups of lawyers from markets across the country to create a system that can generate leases for any jurisdiction, removing the burden from landlords to go and source their own. Thanks to integrations with DocuSign and Cozy, a rent payment platform that was acquired by CoStar in November 2018, the Apartments.com tools can move tenants from prospecting, to applying, to signing to paying their first month’s rent without a hitch.
While the current crisis has certainly heightened the need for renters and landlords to adapt to an online leasing model, digital tools are likely to stick around long after the pandemic is over.
“Online leasing is here to stay,” Russotto said. “Just like online services in other industries, like DoorDash or Instacart, the technology has been out there, but it’s seen a whole lot more currency that’s going to give it legs to stay around in the future. When landlords and tenants realize a lease signing that usually would take them each three hours just took them five minutes, they’re not going back.”
This feature was produced in collaboration between the Bisnow Branded Content Studio and Apartments.com. Bisnow news staff was not involved in the production of this content.