Reimagining Risk: Strategic Coverage Models for Evolving Portfolios

Traditional security deposits sometimes can be counterproductive in multifamily—particularly in the student space. The practice of demanding the first and last months’ rent often makes it impossible for some renters—many of whom would ultimately turn out to be solid residents who pay on time. 

Other would-be responsible renters are frozen out because they haven’t built a representative credit profile or don’t have a cosigner. While the industry has these safeguards in place for valid reasons, it also turns away a significant pool of potentially responsible residents. 

But things don’t have to be so rigid, according to a panel at the 2025 Entrata Summit session Reimagining Risk: Strategic Coverage Models for Evolving Portfolios.  The panel discussed forward-thinking insurance strategies, including embedded coverage, automated compliance and student-specific solutions to reduce risk and unlock revenue opportunities. 

One option is to use a guarantor—an entity that legally promises to take financial responsibility for another person's debt or obligation if the primary debtor fails to do so—for those who cannot qualify on their own. According to Entrata data, nine of 10 properties reported better leasing velocity when utilizing a guarantor waiver and experienced a 40% to 50% reduction in bad debt. 

“We see that with traditional deposit approaches that it really hangs up capital,” said Erica White, SVP of Technology and Strategic Initiatives for Article Student Living. “There are a lot of upfront costs that students just simply don’t have. When we were looking at our approach and what we wanted to solve for, we wanted to increase our leasing velocity and get prospects through that leasing funnel quicker.”

The traditional deposit method of paying the last month’s rent also convoluted things for teams, White said. With many renewal transfers in the student space, the most common accounting-based snags occurred with properly allocating credit toward the roving funds.

While the guarantor waiver seems like a solid alternative and enables renters to pay on a regular monthly schedule, some operators pause at the thought of using a third-party. But the process is made simple when the guarantor option is embedded into the application process. Entrata, for instance, partners with Leap, a deposit replacement company. The Leap platform is offered to any applicant who cannot qualify on their own. 

“In late 2019, we got a call from Asset Living saying, ‘hey, we have a problem,’” said Rory O’Connell, CEO of Leap. “They were halfway through the preleasing season and had 6,000 pending applications where parents hadn’t filled out what they needed to be a cosigner. They had no solution and asked if we could help them find one. That’s how this got started—most innovation comes from a client with a problem, right?”

Leap initially offered the student-based service through an open API, which had a few challenges, but eventually partnered with Entrata and is part of the Homebody Guaranty resident platform that offers deposit alternatives, renters insurance and rent reporting.

“It’s a game-changer to have it all within Entrata,” said K.O. Orsak, Senior Director of Systems IT for Grand Peak. “What do we all need more of? Time. So, to give time back to our team to concentrate on things they really should be doing instead of all the busywork is amazing, and we can do that now.”

Will Robertshaw, Head of Insurance for Entrata, noted that while the tool can help detect intentional and unintentional fraud, the primary purpose of the guarantor tool is optionality for potential renters. 

“It’s a financial amenity,” White said.