MARINA DEL REY, Calif.--(BUSINESS WIRE)--LeaseLock, the only provider of a nationwide A-rated lease insurance program that totally eliminates security deposits, surety bonds and guarantors in rental housing, today announced the results of an analysis examining the impact of the COVID-19 crisis on rent payments at apartment communities in the U.S.
According to LeaseLock’s initial analysis, there was a slight increase in payments on the national level on April 1st when compared to the first of the preceding three months. However, while there is a natural decline in payments after the first of the month, there was a sharper decline in full rent payments in April during the typical 3- to 5-day grace period to pay rent. More specifically, LeaseLock’s final analysis indicates that the average drop in full rent payments was 5% compared to the average. Los Angeles experienced the largest drop at 11% down from the previous months.
Interestingly Seattle, the first epicenter of COVID-19 and one of the first states to implement a stay-at-home order, saw stable full rent payments (46%) but experienced significant variations in partial payment behavior, with a 10% decline in the amount paid. Los Angeles and Atlanta saw similar declines.
On the aggregate, partial payments represented 60% of all payments, an increase of 6% from the previous months. This suggests increasing application of payment plans across the U.S., as apartment operators move to support residents financially affected by the crisis.
“Multifamily operators are doing their best to respond to COVID-19 and implement resident support programs to help those financially impacted. As such, we felt compelled to analyze renter behaviors across our full data set to provide operators with real-time information to help better inform their decision-making,” said Derek Merrill, CEO and co-founder of LeaseLock. “It was important to help provide clarity into renter payment behavior by market and asset class so operators could benchmark their properties against their peers.”
The data is particularly interesting when we examine the types of payments nationwide. Many operators moved quickly to prepare for April, working closely with residents to support them through this challenging time. The data suggests that renters are trying to make some sort form of payment and may also indicate that property managers have been successfully proactive about creating payment plans with affected residents. This could very much foreshadow future rent payment behaviors as more companies continue to work with residents on payment plans.”
Rent payment data is actual transactional data sourced from direct integrations with property management systems in the multifamily industry. The analysis includes a 96,268-unit sample from 1,029,428 units under management by LeaseLock clients. Data is nationwide, representing over half of the NMHC Top 10 property managers in the country and all asset classes (A, B and C). Asset class composition: class A (36%), class B (55%), class C (9%). All data has been anonymized to remove personally identifiable information for renters and property managers.
LeaseLock is the first and only nationwide lease insurance program, rolling out across more than 1 million rental units managed by companies on the NMHC Top 50 Managers ranking. Other leading apartment companies who have replaced security deposits with LeaseLock include Greystar, GoldCor, First Communities, Pinnacle, Compass Acquisition Partners and Avenue5.
LeaseLock helps the world find home. Powered by insurance technology, LeaseLock delivers a modern lease experience for rental housing—faster, simpler and more affordable.
Headquartered in Marina Del Rey, CA, LeaseLock totally eliminates all deposits, bonds and guarantors. Renters pay an affordable monthly fee that generates over $5,000 in coverage for the property on every lease. Renters save thousands of dollars at move-in, while properties increase occupancy, reduce bad debt, and eliminate deposit administration and liability.
LeaseLock has insured over $200 million in leases, and is backed by insurance rated A (Excellent) by A.M. Best. LeaseLock secured $10 million in Series A financing from leading insurance and real estate technology venture funds including, Liberty Mutual Strategic Ventures, American Family Ventures, Wildcat Venture Partners and Moderne Ventures. For more information, please visit www.leaselock.com.