Residents are consumers, and as such, they expect the same conveniences and flexibility when paying their rent as they do with everything else in life. Even before the pandemic accelerated the rush towards mobile and online life, residents expected to be able to pay their rent online.
Whether your multifamily community is looking to replace your current payments solution or looking to adopt electronic payments for the first time, there are many benefits that can help your residential property collect rent online efficiently. Understanding your operational structure during rent week, which includes payment channels, payment types and points of friction is necessary as you evaluate online payments solutions. These elements, along with your future vision of collecting payments, is the starting point to conduct a complete payments evaluation.
Here are some best practices to take advantage of residents moving to online payments.
What does culture have to do with online payments? Well, if you want residents to pay online, you need to have a culture and technology that supports electronic payments. This includes everything from the resources you provide your leasing agents to the payment options you allow your residents to use. It begins with the core foundation of an organization and the rest is implementing a plan to encourage online payments.
There’s no better time to set the right expectations with a new resident than when they stop by and get their new keys! When you have a new resident move-in, they have multiple tasks they need to complete – this ranges from moving, to setting up utilities, getting WiFi up and going and then of course paying their upcoming rent. You have vendor relationships for all these services we’ve outlined and providing residents with a checklist that covers all of this plus a line item to setup their online payments is a win/ win!
Considering that today’s residents are younger than ever before, many of them may be just starting their financial profile. Rent is one of their most expensive monthly bills, and this needs to be reported on their credit. This allows residents that have less than perfect credit or residents trying to build credit for the first time a convenient way to build credit while paying rent. This credit reporting service is often provided to the resident free of charge as an incentive for paying their rent online.
Incentives can influence behavior of both residents and leasing agents. This includes both monetary and non-monetary incentives. For leasing agents, monetary incentives can be tied directly to KPIs that govern quarterly and annual bonus payments. There are non-monetary incentives as well. With monthly usage reports, you’re able to see exactly what sites are using or adopting online payments and what sites are not. By using these reports, it’s easy to encourage and use friendly competition among managers to see what sites can have the most online payments. If you have monthly or quarterly staff meetings, this is a good opportunity to set expectations with the group.
Residents can also benefit from monetary incentives, which can include gift cards, coupons to local restaurants and possibly rent concessions. A key opportunity lies with new move-ins – providing an incentive for paying their first month’s rent online or tying the incentive to a recurring payment is an optimal time to set the desired payment behavior. This added nudge can increase your cash flow and alleviate the need for additional reminders.
Remember, residents are consumers, and consumers want to use their smartphones. They’re using social media apps like Facebook, Twitter and TikTok, and if you have one of these social media accounts, you’ll be able to engage your residents even further. If your residents see your posts and are reminded of the payment methods you support, this is just another avenue to advertise to your residents.
Email & texting
If your portal or payments solution allows texting and/or email campaigns, this can provide another avenue onto the resident’s phone. As consumers, we all need and appreciate friendly reminders to pay our bills. Sending a message to all residents at the same time is a good place to start. Most applications allow for targeted emails based on the resident’s payment behavior. If you have a group of check payers, select a specific message for this group of residents. If you’re able to select only your one-time payers, it’s good to target them with a reminder to set up recurring payments.
One of the best ways to get residents to pay online is to give them multiple payment options. We know that the majority of renters are going to pay with an eCheck, but some residents might prefer to pay with a debit card or credit card. While credit cards are more expensive to process, some residents are willing to incur and pay a convenience fee if they feel they’re able to arbitrage reward points and/or the fee is less than the late fee. Also, your underbanked and non-banked can benefit from electronic payments by using an integrated relationship with MoneyGram. This might surprise most owners and operators, but your underbanked and non-banked do have smartphones. This means they can use their smartphone to access a payment coupon when they go to pay at one of the 40K MoneyGram locations.
If the COVID-19 pandemic has shown us one thing, it’s that the ability to pay rent online is no longer an amenity; it’s a necessity. Collecting rent online can better position your properties in the eyes of prospects and residents, and it can improve efficiency throughout the organization. Still have questions regarding online payments? See how one of MRI Software’s clients simplified their payments process with an online solution.