One former landlord took a tenant horror story and turned it into a tech business that is making the tenant screening process much more sophisticated – and that’s great news for current landlords.
“We’re based on this fundamental belief that credit is broken; that the way landlords currently use credit to screen tenants is basically flawed and that there is really a lot more to the equation than somebody’s seven year financial history for determining whether they’d be a good fit for a rental property,” Dylan Lenz, founder and CEO of Naborly, told CREW. “With Naborly you can think of it as Equifax meets LinkedIn for rental industry.”
Launched in January 2016, Naborly is a full service screening company that delves deeper than just providing a potential tenant’s credit file. It verifies identity, income, employment, and social data factors, among others.
As the company describes itself: “Naborly goes beyond the basics and uses Artificial Intelligence to gather data and analyze not only the potential tenant, but the rental property, and the market in order to determine if there is a suitable fit and what risks a landlord may be exposed to.”
It currently services over 650,000 properties in Canada and United States.
“We look at the rental applicants themselves, and we analyze that data to help landlords know who exactly they’re renting to versus just giving a credit report,” Lenz said.
The service, which includes credit history, is offered at the same price point as a traditional credit report.
The idea for Naborly was borne from Lenz’s own horrible experience with a tenant.
When he was 22, he bought a house, renovated it, and rented it out.
“I ended up getting a really bad tenant that ended up costing me $22,000 in property damages and unpaid rental fees,” Lenz said. “After that, after going through the eviction process, it was very time consuming. During the eviction process, we found out the person had had six convictions in the last 18 months.”
Because that sort of information was not provided through the traditional tenant screening methods, Lenz figured there was a market for providing it.
“Landlords end up making these gut decisions, they try to interpret the (credit) data themselves,” Lenz said. “Where Naborly tries to position itself is that we’re experts in the field of data analysis and we’ve analyzed millions of rental histories and we can basically look at credit information and other datasets the applicant has on them to basically make more accurate predictions around the stuff landlords really want to know.”
Which is not whether tenants pay their phone bills but whether or not they’re likely to damage a property or eventually be evicted.
For more information about Naborly, click here.