The investment of time by property managers in complying with compliance requirements managing a multi-family property has become a major headache. Laws are changing with extraordinary speed and keeping up with these changes is becoming nearly impossible. Thankfully in the last couple years several companies have stepped in to fill the void. This article looks over those security deposit alternatives that can help make the process easier and smoother, a true win-win for landlord and tenant. We look at the benefits, costs and processes that property management companies can expect.
Three of the most renowned security deposit alternatives include Obligo, Reposit, and Zerodeposit. Data shows that when a property management offers deposit free listings, NOI and occupancy rates are boosted and more than 2/3rd of renters take advantage of the offering.
Obligo was one of the most interesting and best rated of those we looked at. It allows property management companies to offer deposit free properties but without the more expensive form of insurance. It is a US-based service that enables tenants to rent an apartment without any security deposit using secure banking technology. It releases the tenants from bearing any additional pressure of paying large upfront deposits and instead gets them paying their rent on time. For those existing tenants, it allows the deposit money to be applied to renewal of lease boosting NOI or to back rent, which is critically needed in these times of delinquency. Obligo offers a simple procedure to renters that they can carry out conveniently and also protects the landlord even more than with insurance, up to 3X the deposit amount. All they have to do is submit a payment method for pre-authorization and Obligo covers the damages without the traditional resistance of other solutions. It simply works like a hotel check-in process. This eliminates a lot of hassle from the buying or renting procedure and Obligo even handles the move-in payments.
One of the most highlighted benefits of Obligo is that it costs nothing to the landlord and very little for the tenant. It also includes a screening process that only high-quality renters can qualify, helping to further weed out low quality applicants. Since it is a deposit free alternative solution, it has been shown to help fill units faster. The result is greater tenant satisfaction. Obligo already has integrations with all the major property management systems: Yardi, MRI, ManageGo and even Salesforce.
A study by the property management company Common found offering Obligo’s deposit free option saved them 3,900 hours of administrative work and helped the tenants keep 1.7 million dollars that they could use to pay their rent instead. It not only covers damages but can be used to recover missed rent and it pays the claimed amount immediately unlike others that go into arbitration first. You can learn more about Obligo here: https://depositfree.myobligo.com/display
Reposit is another credible security deposit alternative that aims to make the renting experience of its clients better. It offers one of the most popular deposit alternatives in the UK. It ensures that tenants, landlords, agents, and everyone else involved in the process get more financial freedom, security, and convenience.
Once you sign up for it, the process is quite simple and quick. The average review score of Reposit is 3.8 stars vs 4.4 of Obligo on TrustPilot but it still is a very popular solution. It has gained the trust of thousands of landlords and tenants in a short span of time. Like Oblgio, Reposit provides greater protection than the typical legally capped rent amounts. The end of tenancy is taken care of by Reposit so it lifts some burden from the property management company.
Zerodeposit is an insurance based deposit alternative. It typically comes out to about one weeks rent. Despite the higher cost for tenants, many appear to be happy with the service provided. As it’s an insurance, there might typically be a little resistance to landlords claims of damage though we could find only some isolated cases in the reviews for Zerodeposit. Clients have seen upwards of 25% more click through when deposit free properties were advertised. The tenants remain responsible for any financial loss or damage. If they fight the claim of damage, it goes to an expert who makes the final decision. If the claim is found in the landlords favor, Zerodeposit will pay you and seek remuneration from the tenant.
After analyzing all the perks, features, and aspects of the best security deposit alternatives, you can pick the one that fulfils your management companies needs and demands.