The Benefits of AI Tenant Screening
As a property manager, you screen tenants based on their financial health, criminal history (ground-floor workers may have to do this themselves), and rental history. In doing so, you hope to avoid low-quality tenants who will not pay rent or make late payments and thus lose money in the long run. Tenant screening is an essential part of your business because it helps keep your business afloat when there's always a high demand for new housing. If a tenant has a better chance of breaking the lease than paying rent consistently, even if that means spending some months late, that will make things more difficult for you as a landlord. That's why it's essential to understand how each tenant screens to take proper precautions before fulling committing them to the lease agreement.
What Is AI and Machine Learning?
You've probably heard the terms artificial intelligence, AI, and machine learning batted around, especially if you have Alexa or another intelligent home device. For example, the same technology that allows Alexa to respond to your questions and predict your preferences is now used to help property managers screen prospective tenants.
Artificial Intelligence, or AI, is the term used to refer to applications that can predict an outcome based on given data. As humans, we have become accustomed to this idea of prediction using online search engines such as Google, which create a predictive interface that displays options for what we are likely looking for when filling in forms or uploading content.
Apps like Google also use machine learning to deliver the best results to users. Machine learning is exactly what it sounds like. The app is refining its results based on your previous searches and the results you clicked on. Tenant screening solutions that use AI and machine learning are doing essentially the same thing.
How is AI Used for Tenant Screening?
You know how the traditional residential tenant screening works. For example, before taking in a prospective renter to live in one of your property services auckland, potential residents go through a process whereby they submit application forms and are given access to credit checks and rental histories along with a criminal background check while you call their references.
AI tenant screening may not be as accurate as a good old human screen. And, of course, it's not meant to replace this valuable service when done right. However, it does do that. It takes out much of the guesswork involved in the process by analyzing data points and coming up with a score just like a credit report would (to determine whether or not they will be a good fit for your properties). It also gives more people the opportunity to qualify than ever before (so previously disqualified populations might get approval after getting their scores with AI!).
Here's how:
Finally, the scoring algorithm considers all debt differently, taking into account good debt and bad debt. So, for example, it looks at student loans differently than credit card debt.
The Benefits of AI Screening Tools
Because AI tenant screening tools take a much more robust approach to tenant screening from a financial perspective, it reduces the risk of financial loss from unpaid rent and eviction processes.
Tenant screening software with artificial intelligence can even the playing field for landlords and property managers by offering a fast, fair, and cheaper way to verify tenant information. Under the Fair Housing Act (FHA), it's illegal for anyone involved in rental decisions to discriminate against a person based on their sex, race, sexual orientation, disability, age, gender, religion, color, familial status, or national origin.
Finally, a tenant's score result is transferable. This has several advantages, including assessing the lifetime value of your tenants currently living in a property and thus providing you with meaningful insight on how they could potentially be an asset when it comes to filling vacancies at similar properties in the future, right? In addition, from year to year, their score will change, yielding additional information that can help you determine the potential value they have as a resident, and you will be able to track this change moving forward.
Tenant screening has been around for a long time. But now, thanks to AI and machine learning, it is less of a chore for property owners and managers as they can use these tools to screen potential tenants faster and with better results.
Conclusion
If you are looking for some auckland property management, reach out to WAPM right away!
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