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Mitigating the Risk Posed by Self-Guided Tours

Mitigating the Risk Posed by Self-Guided Tours

As multifamily operators consider ways to optimize the apartment-shopping experience, it's becoming increasingly clear that self-guided tours are a fundamental part of the future of leasing.

Consider the numbers from the single-family home leasing market, in which self-guided tours are a more established practice. In this market, according to an Anyone Home analysis, 17.75 percent of all prospects book a property tour. Of those that take a tour, an eye-popping 76 percent choose a self-guided one while only 24 percent tour with an agent.

Just like in the single-family market, more and more of today's apartment prospects also relish the chance to tour a home away from the eyes and ears of a leasing agent. Some just simply want as little human interaction as possible during the touring process, while others appreciate the opportunity to see a home without having to sugarcoat their reaction to an agent they like. But perhaps the most appealing reason to self tour is that the prospects can look at potential homes at a time that is most convenient to them, which is not necessarily during normal leasing office hours.

But while home-hunters want self-guided tours, many apartment operators remain leery. This is understandable: Inviting a prospect to take an unaccompanied tour of an apartment community poses some risk. To start with, current residents may not – at least at first – be crazy about the idea of non-residents walking around their community without an associate.

Next, there are the concerns about criminal activity: What if the person taking a self-guided tour breaks into an apartment home? What if they steal from the community? What if this person is an ax-murderer?

The last thing I want to do is say operators' fears are silly. It's part of their jobs to worry about such things. But I do want to say that, in the grand scheme of things, the risks are, for the most part, minimal. I also want to discuss the several steps operators can take to significantly reduce the risk posed by self-guided tours.

Limiting liability

Operators can work with third parties to put in place a number of processes and procedures that weed out potentially troublesome prospects who are at least initially interested in taking a self-guided tour.

The first process takes the credit card number provided by a prospect to cover the self-guided touring fee and verifies the validity of the information provided to detect possible fraudulent applicants.

The second recommended process takes the basic guest card information a prospect supplies when registering online for a self-guided tour – name, email, phone and address – and compares that information against a database of previous online and real-life activity. This analysis assesses the likelihood that the applicant is who they say they are and provides a fraud risk rating of “high,” “medium” or “low.”

The first screening measure outlined above eliminates unqualified or risky prospects before they undergo the second process discussed above (the fraud-risk analysis). Of the prospects who undergo the fraud-risk analysis, only 1.7 percent are refused access to the community because of the likelihood that they are fraudulent.

Embrace self-guided tours

In the end, operators need to know that they can protect themselves from the risks posed by self-guided tours and that those risks are minimal to begin with. In fact, by having certain measures in place to assess the risks presented by those seeking to take a self-guided tour, operators can weed out unqualified or risky applicants before they undergo the formal application process.

Let's face it: self-guided tours are here to stay. Prospects love them, and it won't be much longer before they expect them to be the norm.

This comment was minimized by the moderator on the site

The thing you did not mention in ways to safe guard is the use of Smart Home Technology for Self Guided Tours. We can easily use our technology to give the prospect a one time code to enter the common areas as well as the model or apartment they are considering as well as having the ability to let them in after hours and monitor when they come in, when they leave and turn everything off when they leave. We can also detect if there is still movement or if they left a window or door open. You are correct like Smart Home Technology, Self Guided Tours are a "when" not an "if".

  Vivian E Metzer
This comment was minimized by the moderator on the site

Thanks, Vivian, for your insight about smart home technology and the impact it can have on self-guided tours. There are definitely a lot of advantages to integrating these two technologies. We’re exploring every angle possible and look forward to seeing the transformational impact self-guided tours could have on our industry.

  Todd Katler
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I think there are far more risks to consider than you have outlined here. Scenario one: person passes the “check”, which Jim Jones could likely pass with a pre-paid debit card. The guy goes and tours. While he is there he disabled the device by changing the locks. Oh, look. I have a free apartment. Then when we discover he has slept there overnight and has changed locks, we have to file for eviction. In some states, it takes a ton longer to get out a squatter. In any case, I’m staring at 90 days of rent loss and while he sets up the Kool-Aid for the entire building of renters winning them over to the People’s Temple. Then just before the sheriff shows up - they drink the KoolAid. Now I have a while Building or two to re-rent. But - that self guided tour Sure was convenient for that one dude who rented in another building. Thanks goodness we have that one leased!

Extreme scenario, but still worth consideration. I really wish there were more companies that would consider designing products/services for the value-add, and/or B/C deals. We’re not all new lease ups with deep pockets in a trendy part of town.

This comment was minimized by the moderator on the site

Stephanie, those are some good observations. While I can’t speak for all self-guided tour providers, we share some of your concerns and have addressed them in several ways:

· Our registration process requires an issued credit card (not a gift card or stored value card).
· Once we validate the credit card, we compare the issued name with the name given by the prospect.
· We then validate that the cell phone used for registration is in possession by the prospect.
· We run an Identity Check to detect fraud and any inconsistencies between the supplied information, credit profile and credit card supplied.

As long as all of those check out, we move forward with enabling the self-guided tour. We have been helping Single-Family clients with self-guided tours for five years and just started offering them to multifamily clients. Over the past five years, we have had to combat fraud, which is why we have created the outlined process above. However, we have never had someone claim tenancy, and our terms of use specifically address that to avoid this issue.

Lastly, we designed this product to be extremely cost-effective and I think you would find it an incredibly reasonable solution to increase tours and engage prospects in new ways.

  Todd Katler

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