Blog Details

How SingleKey Tackles Risk Management in Real Estate

In an interview with CanadianSME Small Business Magazine, Viler Lika, Founder and CEO of SingleKey, shared that his experience working at a bank revealed how crucial rental income is for small landlords to cover property expenses and mortgages. Observing that a tenant’s default could cause significant financial distress, Viler founded SingleKey to offer the Rent Guarantee Program, which underwrites rental risks, covering up to $60,000 in rent defaults, legal fees, and property damage. By developing a tenant screening tool to qualify applicants for this program, SingleKey has created a balanced solution that helps both landlords manage tenant risks and assists renters in securing leases. Viler emphasized that transparency and innovative risk management strategies are central to ensuring both parties benefit, particularly with initiatives like the Tenant Passport that help renters qualify even without perfect credit. Navigating challenges during the pandemic bolstered SingleKey’s value and market leadership. Looking forward, Viler foresees rising rental market risks and government regulations but believes SingleKey’s products, such as the Tenant Passport and International Credit Check, will meet evolving needs and continue driving growth.

Viler is the Founder and CEO of  SingleKey , a leading provider of innovative residential leasing solutions, focused on managing tenant risk for landlords and helping tenants get approved in a competitive rental market. Viler holds an MBA and a Computer Engineering degree, and he has a background in Retail Lending and Consumer Credit Risk with 5 years of experience leading teams at Capital One and TD Bank. He is an experienced entrepreneur having successfully founded and exited previous companies in residential home services. Viler is now focused on bringing a fairer, data-driven, transparent, and more accountable leasing experience to both landlords and tenants to make renting stress-free for both sides. He is leveraging his underwriting expertise in banking to help housing providers manage tenant risk while making it easier for tenants to get approved for a lease—especially those who are struggling as new Canadians with no credit or low income.

LinkedIn :  https://www.linkedin.com/in/vilerlika/

Viler, can you describe the inception of SingleKey and what specific gaps or opportunities you identified in the residential leasing market that led you to establish the company?

While working at the bank, I noticed that real estate investors relied on rental income to cover their property expenses and mortgage payments. That meant that when tenants didn’t pay for various reasons, they experienced a cash flow problem. Since most landlords only have about two properties on average, if one tenant doesn’t pay, they lose half of their cash flow.

So that’s where the idea for the  Rent Guarantee Program  came from: to underwrite and price the risk for a small fee, SingleKey could cover all losses related to rent payment default (up to 12 months or $60K), legal fees, and property damage. This allows small landlords to rent with peace of mind while spreading their default risk across our extensive portfolio of lease rent guarantees.

In order to qualify tenants for the Rent Guarantee, we needed to build a tenant screening tool, which is how our  Tenant Screening Report  was born. Now, it’s the most popular tenant screening platform in Canada.

Image Courtesy:  SingleKey

SingleKey is known for its dual focus on assisting landlords in managing tenant risks while also helping tenants secure leases. How do you ensure that your solutions are balanced and beneficial for both parties involved?

We start by focusing on data and transparency. By doing so, we’re giving landlords all the information they need to make the most informed decision when selecting their tenant and leasing their property. The same data from our Tenant Screening Report for landlords will also be used in our tenant products. Renters will be able to share this information securely in their rental applications with as many homeowners as they like without impacting their credit or having to pay for a credit check every time they apply for a new place.

Another way we ensure our solutions are balanced is that we design our data products and risk management programs to solve challenges in the rental market as a whole. Homeowners and renters face different obstacles in today’s market, but renting is a mutual relationship. When we remove the risk of rent default, we’re helping both parties create a stronger relationship that benefits everyone.

Image Courtesy:  SingleKey

With your background in retail lending and consumer credit risk, how has this experience influenced the development of SingleKey’s products, especially in terms of underwriting and risk management?

What we noticed is that most landlords have a checklist of things that they require from tenants, and if that person doesn’t meet the checklist, they don’t get the place. So the outcome is binary, though it shouldn’t be, because it’s affecting housing accessibility.

Since we are better at understanding risk than the average landlord, we found a way to quantify and price that risk in order to help tenants get approved, even if they don’t hit every checkmark on that landlord’s list.

This is the principle behind our  Tenant Passport  program, which is a way for SingleKey to cosign a tenant’s lease as a guarantor, thereby taking away the risk of default from the tenant, and making it much easier for them to get approved by their landlord without having to pay 12 months of rent upfront.

This is especially important for those tenants with no or low credit, no or low income, or no local guarantors who have difficulty competing for a lease.

Lastly, my experience in retail banking and consumer credit has been our competitive advantage, allowing us to innovate in the rental industry and bring new underwriting solutions like our Rent Guarantee. With this program, we’re analyzing data from rental applications and rent payments to accurately predict the risk of rent default. This means we can balance a high approval rate with a low default rate, which enables us to cover a landlord’s risk at an affordable rate.

Image Courtesy:  SingleKey

Could you share how SingleKey adapted its strategies during the initial stages of the pandemic and how these adaptations have influenced your operations and offerings long-term?

COVID was a period of high risk for landlords. As a result, they saw more value in our services, which allowed us to scale up (or multiply)  as a market leader in providing tenant risk management solutions across the country.

The pandemic was also an excellent time to stress test our risk management tools and ensure that our underwriting was sound to stay profitable even within this high-risk environment.

Image Courtesy:  SingleKey

What are some of the macro factors you see shaping the real estate and rental markets? How is SingleKey preparing to meet these evolving demands and continue its growth trajectory?

The market is getting tougher for renters, and the government is stepping in to help them. This is making it more difficult and costly for landlords to operate. This also adds a lot more risk to a homeowner’s plate. As tenants continue to struggle and the government continues to provide more support, our services will become even more valuable.
Housing accessibility is also a significant factor impacting the real estate market, so we’re bringing more solutions like the Tenant Passport to renters. With the Tenant Passport, we act as guarantors for people who may have difficulty securing their lease. Our  International Credit Check  also helps alleviate housing accessibility challenges for new Canadians. This new service allows landlords to access foreign credit history and approve newcomers for their leases faster and confidently. These solutions will become essential tools in the rental market as it becomes even more challenging for renters to secure their new homes.

Responses

Your email address will not be published. Required fields are marked *

Login

Welcome to CanadianSME Small Business Hub