Warning! A harsh reality is coming. ⚠️
No matter what growth stage your rental property management company is in, manual rent collection and traditional payment methods will keep your company from fulfilling its potential.
For example, four out of ten tenants still use checks to pay rent, yet checks are the payment option most vulnerable to fraud. Then there are stressful rent weeks with a hefty admin bill and no guarantee of payment. And let’s forget late and non-payments, which are some of the biggest challenges rental property managers face. 😟
The good news is upgrading your rent payment tools, and processes can pay huge dividends. But how do you go about it? In this article, we’ll delve into the reason why traditional rent collection tools and processes miss the mark. We’ll also share ways to bring rent payments into the future.
Why traditional rent collection doesn’t make the cut in modern rental property management ❌
It’s easy to look at old-school rent collection tools and processes with nostalgia. Soon, you’re putting off change, reasoning that they’re not that bad and how you’ve always done things. But, holding on to traditional rent collection tools and processes will cost you. Let’s explore some reasons why.
Bad and siloed data fuels poor results 📉
Have you ever called the wrong number or been told the wrong name, which you then used when speaking to current or potential tenants? If so, chances are such scenarios weren’t just embarrassing. They also wasted time and left everyone confused. You’re not the only one to be struck by bad data. Outdated information, errors, and omissions cost US businesses a whopping $3.1 trillion every year. The lack of data visibility caused by data trapped in spreadsheets, physical files, and disconnected tools also impacts risk management, compliance and decision-making.
Compromised security makes your business an easy target for criminals
The reality is that manual payment tools and processes are more vulnerable to manipulation. This fact makes spotting fraud from staff and renters harder. Just think how hard it is to spot a forged check, intentional check bouncing, or expense fraud by eye. Worse, your business ends up on the hook for financial and reputational losses. 💸
Financial losses from manual errors
Did you know 79% of renters say they’ve received incorrect, delayed, or lost payments from their property management company which caused them to not rent from them again?😬Not good. Also, the true cost of rent admin isn’t immediately obvious, and there’s the danger. Admin makes up almost 70% of business costs. So, tasks like filing paper statements and verifying rent payments swipe digits from your bottom line. Plus, there’s always the chance costly errors could slip through when you process rent collections by hand.
Costly workforce inefficiencies
Rent week busywork like calling tenants and tools your team can’t access online or use remotely, like accessing physical records, are set up for failure. A lackluster rent collection strategy creates inefficiencies and low staff morale. They also make it harder for your team to hit targets, slowing business development. Yet, these issues are rife. Half of employees with limited digitization spend a minimum of two or three hours per workday on ineffective processes. Also, 59% of workers say they could save six hours or more if they could automate repetitive parts of their role. 🤦
Poor customer experience 👎
Clunky and manual rent payment tools and processes don’t just impact staff; they can also leave a bitter taste in tenants’ mouths. For instance, say you only let tenants pay rent by check, cash, or bank transfer each month. But you only process payments during business hours in the office. The tenant will have to disrupt their busy schedule to pay your team a visit or call if they have a query or issue, causing inconvenience. Mailing checks and ACH payments can also lead to delays in processing, causing anxiety for tenants waiting for confirmation of their rent payments. The result? Missed payments, wasted time, and strained relationships with renters.
Why modernizing rent collection with a rent payments app is always a good idea 👍
If you’ve encountered some of the issues we just covered from traditional rent payment collection, don’t worry. Modern solutions like a rent payment app can help your business turnover a new leaf. Let’s cover a few ways:
End-to-end automation leaves more time and money for valuable tasks
In today’s busy digital world, people value speed and efficiency. Modern rent collections fulfill this need with innovative technology. For example, with Flex, your tenants can pay rent via our app in a few taps. Our solution also equips your team to manage rent collection on autopilot 🤖
Improve tenant satisfaction and financial health
As market volatility continues, renters seek ways to optimize their financial health through rent payments. More flexibility for tenants keeps them satisfied. In turn, you can expect higher retention rates and fewer tenant-related issues. Get this:
- More than half of renters would “probably” or “definitely” pay more for more flexible rent payment options
- 82% of tenants want their rent payments to contribute to their credit score
- 79% believe flexible attributing rent payments to their credit score will give them more financial opportunities
Get more on-time payments, improved cash flow, and fewer evictions
When you’ve got to cover payroll and maintenance, the last thing you want is delayed rent payments. Yet, when tenants pay rent late, you’re down an income source. Luckily, a rent payments app helps you gain more predictability in cash flow. With an app-based setup and automation, your tenants no longer have to do tedious checks on banking details, set up standing orders, or make trips to the property management office to pay rent. With tools like Flex, renters also get payment due reminders. These features make on-time payments more likely. Avoiding late rent payments also helps your business dodge those pricey evictions, leaving more cash in your company’s pocket.
Enhanced transparency and accountability
From intentionally bouncing checks and falsified documents to staff siphoning resources, fraud is on the rise on the rise in rental property management. Using solutions with in-built security features is essential to keep your business safe. That’s where the rent payment app comes in. Reputable solutions use security measures like two-factor authentication, security certificates, and firewalls. As a result, you’ll keep sticky fingers away from your rent payments, giving your team and your tenants peace of mind.
How to improve rent payments without blowing time or budget
Given all the enticing benefits of optimized rent payments, you’re probably keen to start the transformation. So, what move do you need to make? Let’s find out.
Wave goodbye to paper and manual processes 👋
Controversial take: Those paper filing systems, spreadsheets, online rental payment portals, and long processes hinder progress. Even if you let tenants pay rent online now, this setup only creates more issues. We’re talking disbursement mistakes, rent payment delays, and compromised security, just to name a few.
To correct these issues, look for comprehensive solutions that can manage rent collection from start to finish without your team needing to intervene. These automated features could look like:
- Rent payment reminders for tenants before the due date
- Followups to pay rent past due
- Rent cash flow analysis and reports
- Late payment reminders
Top tip💡: Integrate data from other solutions in your business (e.g., HR, ERP, property management, and accounting software) to keep data clean and synced and drive data-driven decision-making
Get tenants involved in the rent payment upgrade 📋
Continuously improving the customer experience should be high on your priorities when changing how tenants pay rent. But there’s a condition: you’ve got to know your tenants’ current wants and needs to ensure your tweaks always hit the mark. For example, instead of cutting out rent payment options and changing the process for staff to pay rent cold turkey, find out which ones the tenants would like to keep. You can get tenants’ opinions on rent payment processes and solutions through:
- Tenant surveys
- Analyzing payment data
- Resident meetings
Prepare your team and tenants for change
When modernizing rent payments, the way staff work will inevitably change. So, it’s essential to build a culture that supports these shifts. Here are some steps you can take:
- Make it easy for teams to get approval for beneficial technology like workflow automation and flexible payments 🦾
- Work with IT to test and launch rent payment solutions. A
- Streamline adoption processes to prevent unnecessary roadblocks. For example, create a dedicated team, timeline, milestones, and checklist for testing a new solution
- Communicate the benefits of each change to staff’s workday, the business, and tenants
- Get buy-in from all stakeholders, including staff and renters 🤝
- Provide adequate team training and a transition period
- Promote your new rent payment options to give tenants a heads-up on the coming changes and how they will improve their lives
- Provide residents with training materials and support lines
Pick and road-test the right solutions for flexible rent payments 🧪
To increase adoption, you’ve got to pick the right technology. This means solutions that help staff and tenants. Your rent payment solution should also be:
- Digital and low to no-code
- Reliable (secure and low outage rates)
- Affordable (for tenants and the business)
- Built specifically for rent payment collection
- Easy to use and understand
- Scalable
- Accompanied by adequate customer support
- Fitted with automated processes
- Equipped with advanced analytics and reporting
Learn more with our flexible payments ebook.
How Flex transforms rent payments
Now for the questions, you’re probably “Why should I consider Flex for securing rent?”. We’re glad you asked! Some perks your business stands to gain by partnering with Flex include:
- An easy-to-use mobile app to secure rent payments in seconds and minutes, not hours and days 🤳
- Affordable, split rent payments. Users can cut rent payments into two manageable portions and adjust the second pay to fit them (subject to terms and conditions)
- On-time rent payments every month for free. We pay rent to your company on the 1st of the month every month, so your team can rest easy
- Automated rent collection. Flex gets rent payments like clockwork every month without your team’s manual effort, meaning more time to focus on scaling 📆
- Live-in staff use Flex for free. Do you have employees living on-site? They’ll get to use Flex for free. It’s a great way to boost employee satisfaction
- Trusted and reliable solution. 5.5 million units across the US use Flex. Flex is among the top 200 in the US Google App Store. It’s got 83,000 resident reviews and a 4.6 rating 🏆
- Boost tenants’ credit scores. Your renters can use on-time rent payments to build credit scores via Flex. This helps tenants improve their finances. It also increases tenant engagement and timely rent payments for your business
- Smooth integrations. Do you use different tools for property management? you can link Flex to build a tech powerhouse. Flex integrates with solutions like Zego, Entrata, Rent Manager, Real Page, and Yardi 🔗
Get a rent collection revamp 🖌️
Whether it’s due to sluggish rent payments or wanting a competitive edge, upgrading how tenants pay and how you process them is always a good shout. But don’t be tempted by shiny objects in the rent payment technology space. Select solutions that offer digital and flexible rent payments in a format that makes managing them easy for all. Test the solution before going all in, and tweak your approach as you gather more data with the tools. For many, that solution is Flex, and our partners are thriving. So, if you’re curious how you can hit reset on your rent collection. Book a demo today.
