Report Shows “Rent From Payroll” Benefits Apartment Industry While Improving Access to Rental Housing for Consumers with Less Than Perfect Credit

Data Affirms 57 Percent Average Increase in Move-ins, 77 Percent Reduction in Skip/Evictions Compared to Leases with Higher Security Deposits

Business Wire

BOSTON--(BUSINESS WIRE)--

In a recent analysis comparing the payment performance of consumers with lower credit scores who moved into rental apartments with a higher cash security deposit or a rent from payroll option, the NPS Rent Assurance rent from payroll solution reduced “skips” and evictions by 77 percent at participating apartment communities. The report, The Rent From Payroll Advantage: How Modest Changes in Lease Offer Terms Are Improving the Way Residents Perform and Communities Profit, was released at the 2014 National Apartment Association Education Conference in Denver.

By providing a mechanism to assure that funds for rent are prioritized from payroll, NPS Rent Assurance reduces the payment risk associated with lower credit scores, which enables landlords to offer more affordable lease terms, thereby increasing consumer access to housing and increasing move-in rates on average by 57 percent.

Analysis of 6,597 lease applications at 50 communities across the U.S. demonstrates that in order to obtain an apartment lease, consumers with less than perfect credit are willing to link rent to payroll to prove their commitment to on-time rent payments throughout the duration of a lease, not simply as a means to qualify. This challenges the traditional practice of charging these applicants extra cash security deposits that typically do not cover losses to apartment communities when renters default and many times makes the upfront cost of the lease untenable for the consumer. Results also demonstrate that improved payment reliability among this consumer cohort leads to more stability for apartment owners, significantly reducing unexpected move-outs, evictions, turnover expense, and bad debt.

“Rent from payroll replaces the ‘pay and pray’ method of moving in residents with extra cash security deposits that don’t prevent payment defaults. It allows consumers with less than perfect credit affordable access to professionally managed apartment communities without having to stretch their personal savings and set them up to fail at some point during their lease,” said Richard A. Levitan, president of NPS “It’s truly a win-win for residents and landlords.”

Residents enroll in rent from payroll at lease signing in lieu of paying higher security deposits, triggering prorated deposits to be sent to NPS directly from their employers every pay period where they are aggregated by NPS throughout each month, and disbursed electronically to rental communities when due.

“Once a rent from payroll system is set up for the resident, it becomes effortless for them,” says a national training director at a major real estate investment trust. “They set it and forget it. They get their paycheck with their rent installment segregated by having it directly deposited into a separate account. They don’t have to do anything online because everything is already taken care of.”

Download a complimentary copy of the report here.

About NPS Rent Assurance

NPS Rent Assurance is the originator of rent from payroll and the only rent from payroll platform providing the apartment industry with a proven solution for capturing incremental occupancy with improved payment performance from consumers with less than perfect credit.

Contact:
LinnellTaylor Marketing
Chris Wood, 303-682-3945
chris@linnelltaylor.com
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