Tenant complaints, choppy cash flow, and never-ending admin—sound familiar? These are just a few signs costly payment mistakes have infiltrated your camp. You’re not alone. Across the pond, 60% of UK landlords have seen a spike in late rent payments, and this is just one problem. A less-than-stellar payment stack and process impacts tenants, too. 79% of renters say issues, like lost, incorrect, or delayed disbursements from their property manager, have caused them to stop renting from them. 🫨
Efficient and accurate rent payments are pivotal to your company’s success. So, it quite literally pays to get your solutions and processes in order. In this article, we’ll shine the spotlight on the top payment faux pas in rental property management and ways to avoid them. We’ll also reveal a popular solution you can use to get your payment stack up to scratch without investing heaps of time, effort, and money. Let’s get into it.
7 lethal payment mistakes rental property managers make
Mistakes, we all make them. But when your company’s money is on the line, it’s best to prevent as many as possible. The first step to solving issues in your rent payments is acknowledging they exist. Let’s zoom in on some of the most common mistakes.
Mistake #1: Enforcing rigid payment schedules 📅
No one wins when you have inflexible rent payment rules and processes. Your staff has to battle through rent week chasing late payments. Renters can struggle to pay on time, putting your company’s precious cash on the line. This issue is rife. 40% of renters say flexible rent is important. Yet, just 9% of tenants can access flexible payments.
With such demand for more relaxed rent payments, one thing is clear: strict schedules will hold your company back. On the flip side, investing in flexible rent payments can help your business attract and retain more tenants.
Mistake #2: Using manual tools and processes
Late and non-payment is one of the top issues property managers face. Traditional payment methods like manual checks and paper-based transactions worsen the issue. Do you use industry favorites like standing orders and an online rental payment portal? Well, these aren’t off the hook, either. Such tools give little leeway on payment times and are often separated, making it more difficult to leverage data for decision-making. This situation can lead to even costlier issues like misallocation of funds and regulatory noncompliance. Yikes! 😨
Mistake #3: Using expensive solutions
Have you ever sneaked a peak at how much bank transfers and your online rent payment portal cost? For many, it’s a jump scare moment. Charges for receiving wire transfers can hit $50, and some rent payment portals levy hefty fees on tenants and landlords. In the end, these solutions cream huge slices of cash off your company’s bottom line. Worse, these solutions don’t translate into better processes for the company or tenants. It’s essentially pouring money down the drain. 📉
Mistake #4: Settling for fragmented and clunky systems
Building a robust and diversified payment stack is essential, but the wrong setup is a recipe for disaster. Issues arise from disconnected tools and processes, especially for tasks like rent collection, expense management, bookkeeping, and tenant communication.
For example, many property managers use Excel, physical receipts, and email to track rent payments. The problem is, that this setup can cause mistakes, backlogs, and customer complaints due to the manual processing aspect and authorization bottlenecks. Late payments and delinquencies can also go unnoticed due to siloed data. On the flip side, companies that use the right technology in property management see a whopping 800% ROI. They also skyrocket data visibility and improve decision-making.🔥
Mistake #5: Resistance to high-tech solutions 🗒️
Whether you’ve got snail-mail fans or avid cash counters on your team, being digitally averse sets your business up for failure. Before you know it, you’re missing opportunities, losing money, and falling behind competitors. On the other hand, digital transformation will give your rental property management company a competitive edge. We’re talking increased growth, tenant satisfaction, and efficiency to name a few perks. For example, from 2018 to 2022, digital leaders have built their active customer base at a rate of 0.5% and revenues by 0.8%. That’s compared to digital laggards who saw no growth in their active customer base and a 1.4% drop in revenues.
Mistake #6: A lack of transparency, security, and compliance
Unclear payment processes, hidden charges, and questionably high fees are just a few mistakes that muddy the waters in your rent payment process and create a poor tenant experience. Lax security measures, like keeping credit card details in hard copy, using shady payment tools, or switching between umpteen bank accounts, can also expose your renters to data breaches and fraud.
In such cases, tenants can lose trust in your organization and cut ties, leading to reputational damage and financial losses. 65% of businesses that suffered payment fraud or cyber-attacks couldn’t recoup the funds from the successful fraud attempt. 💸
Mistake #7: Using too many payment tools
While diversifying how tenants can pay rent is key to maximizing on-time payments, you must be strategic. Throwing together too many tools can overwhelm renters and create more busy work for your team. Just think how much time everyone will need to learn each solution and manage payments through them.
Instead, offering a comprehensive solution or two is best to make everyone’s lives easier. Each rent payment solution you use should be digital, with flexible payment terms. It should also leverage automation, be secure, and complement other solutions in your payment stack. For example, Sage Ventures saved ~5 hours of admin work per Assistant manager per week by upgrading their rent collection process with Flex. 👏
Quick solutions to your payment-related headaches 💪
Have you made some of the payment mistakes we covered? Don’t sweat it. Let’s run through some quick tips to course-correct your rent payments.
- Streamline and speed up processes by going 100% digital with integrative solutions
- Encourage flexible, online rent payments by onboarding a mobile app-based solution like Flex (more on this in just a few seconds)
- Opt for user-friendly platforms that leverage automation to simplify payment processes and reduce mistakes
- Enforce fair and clear policies on rent collection. E.g., set out due dates and penalty charges outlining due dates and late payment penalties
- Select rent payment solutions that are affordable for tenants and your company and have transparent fees
- Choose solutions that prioritize security. Each solution should have protective measure firewalls, encryption, and identity verification and be pen-tested often
- Conduct thorough tenant screenings. Go beyond regular background and credit checks, e.g., check social media and internet presence, and conduct in-person interviews
- Keep improving your payment stack and processes based on company data and tenant feedback
How Flex upgrades rent payments from “meh” to magical ✨
Good news! You no longer have to settle for expensive, stiff tools and processes that create endless headaches for your team. Flex offers a purpose-built rent payment app that allows users to split rent into two affordable portions. Flex also provides:
- Automated reminders, payment collection, follow-ups, receipt sharing, and record-keeping
- Predictable, on-time rent to the landlord each month
- Modern and easy user experience
- Low fees for tenants and no cost to your company
These features result in:
✔️ Faster transactions
✔️ Reduced errors
✔️ Less admin
✔️ Enhanced financial visibility
✔️ Increased tenant satisfaction rates
✔️ Improved net operating income
✔️ Higher return on investment
✔️ and much more.
Leave lackluster rent payments in the past
In today’s competitive rental market, efficient payment solutions and practices are more critical than ever. So, step back and consider which mistakes your company is making with rent payments. Take inventory of the solutions you’re using and the results they produce. Then, find and test solutions that will level up your payment stack. Be strict in adoption criteria for your rent payment solutions. Focus on solutions with features that enhance cash flow, staff productivity, security, and renter happiness. Test them thoroughly before going “all in.”
Take these steps, and you can have a rent payment stack that makes tenants smile and takes your business to new heights. 🚀
Are rent payments standing in the way of your company’s success? Get ahead with Flex.
