With rental vacancy rates at their lowest levels in 10 years, a review of TransUnion’s proprietary rental screening database found that rental prices remained about the same between the fourth quarters of 2010 and 2011.
The average rent for the nation declined from $831 to $820, though the average deposit increased from $269 to $284,based on national data collected from property managers utilizing TransUnion’s rental screening solutions in both 2010 and 2011. More than 200,000 rental applications were reviewed.
“We’ve seen greater demand for apartments over the past year, but it hasn’t exactly translated into significantly higher monthly rental payments for consumers,” said Steve Roe, vice president of sales for TransUnion’s rental screening business unit. “This is likely a direct correlation to our economy today, with unemployment remaining stubbornly high. It’s important to note, though, that there have been regional differences with average rental payments in some markets increasing more than 10 percent in the last year.”
While, on average, rental payments remained about the same between the end of 2010 and 2011, property managers did tighten their acceptance criteria for potential applications that are accepted without any conditions such as a higher deposit amounts. Based on a proprietary decisioning algorithm where property managers may determine the weight of certain selection variables, TransUnion’s analysis found that of those property managers that made changes to these measures, their acceptance criteria increased by more than two percentage points.
“An increase in this criteria would seem to indicate that property managers’ rental volume is sufficient enough that they can afford to be more selective in offering premium terms,” said Mike Mauseth, president of TransUnion Rental Screening Solutions. “It’s important for property managers to find the ‘right’ tenant for their unit, someone who will be responsible in their monthly payments and remain at the property for the duration of the lease. Property managers’ potential revenue is negatively impacted if a tenant skips or gets evicted.”
TransUnion found variances in the national data. For instance, between Q4 2010 and Q4 2011, average rent in Denver increased 10.2% from $777 to $857. Average deposits in that same timeframe have moved up from $340 to $383. Acceptance criteria in Denver also increased approximately two percentage points.
“Every rental market is unique, but property managers should always be in search of reliable tenants,” said Roe. “Property managers have the ability to conduct due diligence on their prospective tenants by using rental screening services such as TransUnion CreditRetriever