Multifamily property teams are often over-burdened and time-taxed by their growing number of administrative tasks. Technology has proven to be a valuable stopgap to ensure nothing is overlooked throughout the lifecycle of a lease, and new solutions have emerged to help streamline routine processes for residents.
But a significant pain point still exists for many operators post move-out. Managing deposit refunds and claims often prevents property teams from effectively turning the page on former residents. Whether managing an eviction or debt recovery, these processes are time-consuming and contentious. And due to the potential for rent loss – especially during and post COVID-19 – teams can’t afford to commit anything less than their full attention to the issue.
Forward-thinking operators are re-envisioning how they handle claims—moving beyond deposits entirely, skipping the administrative headaches, and streamlining the debt recovery process. Lease insurance technology helps operators start the process earlier and eases the burden of facilitating claims for overstretched teams. Plus, these technology solutions increase onsite team productivity and eliminate long-standing pain points for the industry.
Below are three operational and financial benefits of optimizing the claims process to help properties stay on top of post move-out tasks and prevent revenue from slipping through the cracks.
1. Lighter Administrative Workload
Modern claims solutions avoid any out-of-workflow operations for property teams by seamlessly deploying through native property management systems. This setup enables teams to initiate a claim with a single click and property managers don’t have to worry about leaking revenue due to overlooked claims.
Also, associates aren’t saddled with managing deposits, third-party out-of-workflow surety bonds or refunds, returning valuable time to their workdays. Without the need to navigate yet another technology platform, teams can maintain their focus on delivering top-notch customer service to residents and prospects.
Because onsite associates aren’t typically proficient at debt recovery (it’s not the job they were hired to perform), a simplified and integrated claims process will reduce the administrative workload on property teams. At the same time, operators can improve employee satisfaction and revenue capture.
2. Faster Claims Returns
Streamlined claims also expedite the rate of return on that revenue. For example, by replacing upfront security deposits with a small monthly fee in the online leasing checkout, operators can instantly generate lease insurance certificates in their system which in turn lowers bad debt. This also means faster claims payouts.
With insurance certificates in place, operators no longer have to wait months or years for a collections agency to recover funds from residents. Faster returns also mean operators won’t incur a substantial reduction in recovered revenue once the collections agency deducts its fee.
Under this model, property teams simply need to close out the final account statement and initiate claims immediately through the native receivables process.
3. Stronger Online Reputation
Replacing deposits with lease insurance not only allows operators to reduce administrative burdens and sidestep collections for quicker payouts but also eliminates a key point of resident contention after move-out.
Most multifamily properties have an online presence—whether that presence is characterized primarily by positive reviews is debatable. In some cases, the feedback doesn’t describe a poor living experience, but rather dissatisfaction with the security deposit refund amount or a delayed return of deposit funds. Worse yet are the reviews from residents who find out they owe repayment for damages which they assumed their surety bond payments would cover.
What would removing that source of negative reviews do for a property’s overall online rating?
When traditional security deposits aren’t a factor in the leasing equation, neither are deposit-related reviews. Without the possibility of deposit disputes or collections, operators can control the customer experience and part ways with residents on amicable terms to avoid negative online reviews.
The Evolution of Claims in Multifamily
More and more operators are realizing the benefits of optimized claims by replacing security deposits with lease insurance at their apartment communities. This advantage in the post-move-out process removes the unnecessary administrative workload associated with claims processing. In addition, it expedites claims payments, while also enabling associates to focus on the resident experience to prevent potential negative reviews.
By eliminating antiquated deposits and surety bonds, operators can establish a better claims management system and boost employee and resident satisfaction. The end result? Maximal bad debt recovery and NOI growth.