The Real Estate Encyclopedia
RentersAmerica
Category - Service Providers in Real Estate - Service Providers General

What is RentersAmerica?

Introduced in January 2013, RentersAmerica is a new security deposit alternative program and resident membership association that helps multifamily property owners and managers improve their NOI, while allowing residents to lower their move-in cash requirement. 

How does RentersAmerica work?

At lease signing, prospective residents are offered a choice between paying a traditional cash security deposit and paying a one-time, non-refundable membership fee in the RentersAmerica program.   The membership fee costs less than a traditional security deposit and allows the renter to have all or a portion of the security deposit waived for the life of their residency. The waiver continues should the resident move to other units in the community or to another community within the same owner or property managerís portfolio.

For example, instead of a $500 security deposit requirement, the resident can opt instead to pay the one-time membership fee of $104.50, which allows the resident-member to have their traditional security deposit waived for the life of their residency.

The residentís one-time membership fee automatically enrolls the resident in RentersAmericaís rewards program which offers discounts, coupons and special member pricing at more than 300,000 national and local providers.

In the event that a residents skips on their rent or causes damages to their apartment at move-out that exceed traditional security deposit amounts and are not otherwise collected from the resident, the property owner or manager incurs bad debt which hurts their bottom line.  RentersAmerica allows property owners/managers to use the funds generated from all of their residents in that community that have enrolled in the membership program to pay for this uncollected debt caused by the negligent resident.  With the multifamily industry experiencing typically on average a 10%-12% default rate by those residents that owe money at move-out, property owners/ managers can utilize the membership fees of the many (the other 90% or so) to pay the debt of the few.

RentersAmerica then assumes responsibility for collecting that money from the resident that failed to comply with her or her lease terms.  In addition, RentersAmerica provides detailed reporting to property owners and management firms which reveal (provide some detail about the reporting).

The program is offered at no cost to the property owner/manager or the community.

How does RentersAmerica benefit property owners and managers?

RentersAmerica allows property owners to reduce bad debt, generate ancillary revenue and increase occupancy. 

Specifically, the disbursements from the owner/managerís funds which are comprised of the residentsí membership fees and are maintained by RentersAmerica, are paid directly to the owner/manager to reduce their bad debt after they have filed a disbursement request.  RentersAmerica also allows property owners/managers to market their properties more aggressively to prospective residents by reducing the move-in cash requirements.  The membership rewards program serves as a resident retention tool, which also boosts occupancy rates for the owner/manager.

In addition, RentersAmerica also helps owners/managers generate ancillary revenue through 1) the programís marketing fees and 2) the excess funds that remain in the owner/managerís disbursement account that were not needed to pay move-out debt. Because RentersAmerica assumes responsibility for administering its program and collections, owners/managers also benefit from the reduced costs typically associated with the administration of traditional security deposits and collections. 

Lastly, RentersAmerica provides detailed or summary information about the community to executives at the property owner/management firm to allow them to more proactively monitor their debt and leasing picture.

How does RentersAmerica benefit residents?

Residents who opt to pay the membership fee in RentersAmerica benefit from better cash management because they can hold onto more of their out-of-pocket cash that might have been used to pay for a more costly traditional security deposit.  Alternatively, the resident can use that extra money for other expenses when they need it most. RentersAmericaís security deposit waiver is in place for the life of the memberís residency.

In addition to saving money at move-in, residents can save money throughout their lease term through the RentersAmerica rewards program.  Even moderate usage of the program by the resident can easily offset or exceed the minimal annual rewards program renewal fees Should a resident move to another apartment within the owner/managerís portfolio, the resident is not required to pay another membership fee (The membership fee might increase however, if the resident moves to a more expensive unit within the portfolio; the resident will then be required to pay the difference in the membership fee amount.)

Who is behind RentersAmerica?

The program was developed by Bankers Financial Corporation, which pioneered the security deposit alternative industry in 1995 with one of the first resident surety bond programs. That resident surety bond program became the leading security deposit alternative program in the U.S.  RentersAmerica represents the newest generation of security deposit alternatives from Bankers Financial Corporation.  The program is backed by Bankers Insurance Group.

 



References
 
Category(s)
Service Providers in Real Estate - Service Providers General
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