The number of units offering deposit alternatives has increased over 7x each year for the past three years.
What this means
Sooner or later everyone will interact with one. The knowledge of another option is growing among renters. The answers to “have you heard of ___?” are changing. The best time to market a deposit alternative at your properties could be now, as prospective residents are primed to learn more about the offerings.
A permanent change is here, but it’s not one to worry about. Our deposit alternative has the potential to completely replace traditional deposits because it’s built to give our partners the highest quality experience within a product designed specifically for them. At the very least we believe we’ll occupy equal space within the multifamily industry as cash on hand. Properties now have access to options that do more for them than a cash deposit ever did, and for owners this poses a relatively low-risk opportunity to explore the alternative space and better understand the potential for a solution that adds measurable value to leasing processes.
There will be differences in quality. Similar to any group of competitors racing to the best version of something that actually works, the deposit alternative space has players who vary in what they deliver. Surety bond solutions and lease insurance solutions are the two industry leaders, and they offer different experiences for owners and have different impact on residents.
Know how to spot those differences. Different properties have different needs. Not every provider offers a product that truly responds to property-specific needs. And we all write lots of things about ourselves and each other, which makes it harder to tell. Here’s something that none of us wrote that compares the deposit alternative providers that serve multifamily housing.
We’re past the question of whether these solutions are long-term. They are, they’re here to stay, and now owners must focus on choosing the right one.