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Reducing fraud losses and unnecessary evictions with AI-driven multifamily automation solutions 

6 Jun 2024
featured reducing fraud losses and unnecessary evictions with ai driven multifamily automation solutions

Fraudulent applications in multifamily housing are becoming increasingly common.

In a 2024 survey by the National Multifamily Housing Council of rental housing providers, 93.3% of respondents reported experiencing fraud in the past twelve months. Respondents also report that 23.8% of their eviction filings were linked to fraudulent applications and failure to pay rent over the past three years.

While most renters are honest, losses and unnecessary evictions increase the cost of rental housing for everyone. In the same survey, the average respondent was required to write off nearly $4.2 million in bad debt over the past 12 months, approximately a quarter of which was attributed to nonpayment of rent due to fraudulent applications.

Intelligent document automation enables property managers to avoid losses and unnecessary evictions by streamlining application review, income calculations and fraud detection.

Streamlining multifamily resident application review

When done manually, tenant screening can be labor-intensive for property managers. It involves numerous documents, ranging from rental applications and lease agreements to tenant background checks and utility bills. Each document adds complexity, increasing the time and effort required for the application process.

Manual application reviews also face challenges from human error, from inconsistent income assessments to oversights from tedious “stare-and-compare” work. Document automation enables property managers to streamline and accelerate resident applications.

Property managers can process applications more quickly and confidently by automating time-consuming, manual tasks like data entry, document organization, and verification, protecting against costly delinquencies and evictions.

Adding efficiency and accuracy in income calculation

As the economy and workforce continue to evolve, the diversity of income sources for prospective residents in multifamily housing has expanded significantly, posing challenges for property managers who need an accurate understanding of applicants’ financial health.

Non-traditional income profiles require more sophisticated and adaptable income calculation methods. By leveraging advanced AI-powered automation, property managers can assess income data from various sources to verify application information accurately. This technology can verify a wide range of critical documents, including bank statements, W2s, brokerage statements and pay stubs, helping reduce delays and errors in the application process. 

Preventing increasingly sophisticated fraud tactics

As fraud tactics evolve, it’s more important than ever for property managers to catch and manage risks early in the screening process. Fraudulent applications can lead to significant financial losses, unnecessary evictions and damage to a property’s reputation.

While manual review methods often fail to identify sophisticated fraud tactics, intelligent document automation technologies like Ocrolus leverage AI to detect subtle changes in financial documents that human eyes could easily overlook. This gives property managers greater confidence in the authenticity of applications.

By detecting application fraud earlier, property managers can proactively safeguard their properties and finances while attracting higher-quality tenants.

How Ocrolus can help

With the spike in rental application fraud, property management companies need robust solutions to detect fraudulent documents, automate income calculations, and efficiently scale their operations.

With increasing fraudulent rental applications, STYL Residential turned to Ocrolus to help detect fraudulent documents, automate streamlined income calculations for prospective residents, and efficiently scale its operations.

STYL updated its process to include uploading applicant documents into the Ocrolus dashboard, awaiting the results, and reviewing the signals for informed decision-making.

The new review process powered by Ocrolus enabled STYL to simplify and standardize its applicant review process, eliminating concerns about human error and ambiguity. This approach reduced the time and effort required for screening and improved the accuracy and reliability of their evaluations. By leveraging Ocrolus’ AI-driven technology, STYL ensured consistent and thorough income assessments, helping them make more informed leasing decisions.

Fraudulent applications in multifamily housing cause significant financial losses, unnecessary evictions and challenges for property managers and tenants alike. Intelligent document automation technology like Ocrolus can help streamline application review, income calculations and fraud detection.

By streamlining these processes, Ocrolus helps reduce human error, speeds up document processing, and enhances data accuracy. This leads to better decision-making and improved operational efficiency, allowing property managers to focus more on building strong tenant relationships and maintaining high occupancy rates.

Book a demo today and discover how Ocrolus can help modernize multifamily tenant screening workflows.

Key takeaways

  • Leveraging AI-driven document automation reduces errors and enhances the speed and accuracy of tenant screenings.
  • Early fraud detection protects property managers’ financial health and attracts higher-quality tenants.
  • Ocrolus’ technology streamlines income assessments and application reviews, supporting scalable growth and upholding industry trust.