Lease Termination Risk Management

After the housing crash of 2008 rental housing became the only viable option for millions of Americans. Eight years later, the amount of renters continues to increase while the percentage of homeowners continues to decrease. Many renters cite flexibility and lack of worry as a reason for renting.In the last few years the rental housing sector has rapidly grown into the $1.3 trillion industry it is today. This type of growth, coupled with the fact that over 50% of Americans are financially cost burdened, leads to renters and owners sometimes encountering the pain-point of early lease termination. Whether tenants are faced with financial issues or unexpected life changes, breaking their lease can often result in steep break fees or legal action.

This research project will focus on a new type of risk mitigation service that addresses early lease termination and its impact on the industry overall.

Project Mentor

Teddy Toliver, Founder / President, TurnKey Lease Solutions
Jim Jones

Competencies needed by the students involved

  • An understanding of apartment renting and rental lease agreements
  • Financial modeling
  • Insurance
  • Data Analytics and Actuarial
  • Analytical skills
  • Interpersonal skills
  • Research – identify current market options as well as gauge interest in this alternate option

Recruitment Status:

Open

Goals

  • Gather & analyze market data on overall awareness of lease break options.
  • Gather & analyze market data on options provided by apartment owners and management firms to tenants when a lease needs to be broken.
  • Gather and analyze market data on how, when and why leases are broken.
  • Understand owner’s process for enforcing and managing tenant Renter Insurance.
  • Develop an underwriting process for engaged and enrolled tenants.
  • Determine if there is any correlation between credit requirements and ability to pay rent.

Final Deliverable

  • A research report that identifies and analyzes the rental housing market with particular focus on break option awareness as well as purchasing and usage patterns of rental housing tenants and owners.
  • Develop an underwriting strategy/process based on select tenant and owner indicators which allow for accurate service offering pricing.