Aldon Management

Featured Challenge

As Senior Vice President, Company Operations, Sarah Jane Milliren was in a unique position to observe how pervasive and damaging rental fraud could be. “When we acquire a new property, we underwrite it to suit the industry norm. But norms look backwards, and the industry is changing,” she says. “We're finding ourselves misaligned with the underwriting goals on our bad debt. So we started exploring why we had higher bad debt in the first place. Where is the disconnect between our projected operating costs and the reality?” “We noticed some people moving in and taking their first free month, then not paying on time, which was a clear indicator of future behavior,” Milliren says. The team at Aldon also noticed how much worse fraud could be during a highly concessionary market caused by the volume of lease ups. “Before we acquired a new site, the criteria during lease-up would often be softened, less rigorous. Prior owners would offer aggressive concessions and benefits to get ‘heads-in-beds’ fast. The people coming into the freshly leased-up community have less stringent screening criteria for credit or criminal backgrounds or identification. In many cases, prior owners had a lower rent-to-income threshold when screening occupants. On top of heavy concessions to complete the lease-up process, we’d see the perfect storm for increased bad debt.” According to Milliren, the question became, “How do we fix this? How do we get a renter who not only can pay rent but will pay reliably? We started exploring using technology knowing this problem was not unique to Aldon, but a challenge for our industry.”

Featured Solution

Aldon Management needed a solution that would save time and energy, and help team members avoid frustrating detective work. “Verifast was one of our final two contenders to solve for what we were looking for in ID verification,” says Milliren. “We needed income verification to test if a document was real, or if a PDF had been manipulated. We don't have super sleuths on our payroll and we can’t spend our time going down the Google rabbit hole for every applicant. So we were thrilled with the Verifast Demo — just green flags across the board. It was honestly more product than we knew we needed.” According to Milliren, Verifast pulled ahead with its unique ability to confirm any income stream. “Verifast can verify gig work, and test everything. No source of income has come up that we’ve been unable to verify. The other solution wasn't able to offer that because Verifast clearly has the more robust technology.” Once the decision was made, implementation was fast and easy, as was switching from one version of Verifast to the new-and-improved software. “It was a seamless implementation. We were on the original version of Verifast, and we just activated the new version last week. Switching versions felt easy,” Milliren says. As an innovative force in property management, Verifast did encounter some initial pushback from the Aldon Management leasing team. Yet despite these misgivings, the new software was soon indispensable. “When we rolled Verifast out in Spring of 2024, the on-site team was apprehensive to see the value.” Milliren explains. “They worried our residents would feel it was invasive to connect to their bank or payroll provider. But Verifast is so convenient for both our team and for any honest applicant. Later that year, during our budget meetings, we get to the Verifast line-item, and universally managers insist we take anything else away before we lose Verifast. In five months, we went from ‘everybody's going to push back on using this’ to ‘please don't take this away!’ Pretty neat to see people go from naysayer to cheerleader in five months.”

Featured Results

Verifast was immediately useful as a deterrent to making bad actors act badly elsewhere. “Verifast is catching fraud, and having that gatekeeper makes the fraudsters choose somewhere else, like how a car thief would rather not break into a highly lit garage with cameras to steal a car. Bad actors would self-select out of the initial application,” says Milliren. Weeding out the problem applicants helps the team at Aldon fulfill their founders’ mission of providing housing even in difficult times. Milliren says: “In the last two years, it’s been harder for people to pay their rent due to job loss, roommate separation, divorce, just life. But Verifast is doing its part to mitigate bad debt. Our bad debt may not be decreasing as significantly as first desired, but we attribute much of this to life’s hardships which may force renters to get behind on payments, when they otherwise would have the ability and willingness to pay. But by eliminating fraudsters and showing a more holistic image of an applicant’s fiscal life, we’re clearing the way for people who are honest and work hard to pay their rent.” Being more certain of each applicant’s cashflow means being able to allow more people to apply, so long as their fiscal outlook — even at lower income levels — is reliable. “Another sign of success comes from around two months ago, when we reduced our rent-to-income ratio,” says Milliren. “Verifast has proven to be such a good gatekeeper that we feel confident we can allow more renters into our community while safeguarding that risk against bad debt. We can review the data Verifast provides to confirm that people can pay their rent if we lower the floor a little bit. We feel comfortable knowing that won’t have an adverse impact because Verifast makes sure our prospects, even when they make less, earn the money they state on their application. That’s the best testament to our comfort level and the success of this software.” “We value our partnership with Verifast and are excited about the continuing enhancements in the technology. We have received excellent support for the Verifast team. It's been a good journey and a good partnership,” Milliren concludes.