Paying the rent is a large obligation for many Americans. For some, it is the largest expense they face on a monthly basis. The percentage of U.S. households who paid rent to a property manager increased from 36.1 percent in 2006 to 41.1 percent in 2014, and renters in 2014 paid an average of 20.89% of their incomes in home rental costs. Because of the weight of the cost of living, not every tenant is able to pay their bills and their rent on time. Dealing with late and delinquent payments is an unfortunate but common part of managing an extensive number of properties.
Most property managers are constantly on the lookout for ways to reduce their number of late and delinquent payments, but they might not realize that adopting a system of electronic payment management is an effective approach for dealing with the issue, especially if they configure that system to accept payments online.
One recent study found that the majority of residents still make payments using paper methods like cash and checks, while only 16% paid through online channels. Despite this trend, consumers are becoming payment omnivores. Although many people still prefer to receive their bills in the mail as a reminder and a method of documentation, the number of people who pay bills online has been steadily increasing over recent years.
But electronic payment isn’t just a solution for tech-savvy tenants; it can also be a cost-saving measure for property managers and tenants of all ages and backgrounds. Because of the long list of benefits electronic payments offer, like increased payment accuracy, clear reporting, and the ability to manage exceptions with ease, you can reduce your tenants’ delinquent payments through electronic payment management.
Help Your Tenants Pay Their Rent
One of the main reasons tenants can’t pay their rent on time or pay their rent in full is that they simply lack the funds to do so. For this reason, having an online payment system that allows multiple roommates to easily contribute to the monthly rent can help to solve tenant cash flow issues. If one tenant lacks the funds to pay rent in full, roommates can negotiate their individual payments amongst themselves and submit a full payment to their property manager.
Online payment solutions can also support payments made by credit card. Property managers are sometimes reluctant to accept rent payments by credit card because of the costs they incur from credit card processing fees. Thankfully, a modern payment platform allows property managers to offset these costs by charging a convenience fee to those tenants who choose to use a card. High convenience fees can reduce tenants’ incentive to pay rent with a credit card, however, so the challenge for property managers is balancing the convenience fees they charge with the costs of processing card payments.
The best payment platforms can calculate and charge a convenience fee that will cover the costs incurred by the property manager without generating a convenience fee that is so high that tenants refuse to pay their rent at all. Modern payment platforms can also be customized for different properties and buildings, covering the range of a property manager’s portfolio.
Accepting electronic payments online also provides property managers the option of sending outgoing payment reminders through SMS and email. These types of reminders are beneficial to tenants who have the funds to pay rent but frequently pay late or simply forget. They also establish a direct line of communication between property managers and their tenants, allowing them to resolve any issues that might arise over rent payments. If a tenant is having trouble making rent payments, outgoing reminders can start the necessary dialogue for establishing a payment plan.
Implementing an Electronic Payments Solution
As a property manager, if you are looking for a modern solution to will help you get your rent payments on time and in full, implementing an electronic payments solution is your best option. A versatile electronic payments solution can be integrated with your existing property management system quickly, with little disruption to your regular collection activities. Despite your adoption of this new technology, you won’t have to worry about a learning curve, either. Partnering with a payments solution provider will help you ease your transition into your new system.
Once your new billing platform is in place, you can encourage widespread adoption among your tenants by promoting the system’s convenience and the fact that you are going paperless. You can also get more tenants to adopt by encouraging them to take advantage of new payment options should they find it difficult to pay the rent. In the backend, you’ll see clear, digital documentation of every payment you’ve received and which payment method was used to deliver them, all in a single interface. You’ll also have up-to-date information on all your tenants’ rental payments so you can keep track of who is on track and who is falling behind.
To best serve your tenants, you need to receive the funds you are owed. An electronic solution gives tenants more options for making a payment, helps you determine what fees should apply, and establishes direct lines of communication so you can ensure that there are no barriers between you and your payments.