By now, you’re probably well-versed in Rent Week and battling the chaos that comes with it. Working overtime days before rent is due may even be your norm, yet you can never get ahead. You’re not alone. The Rent Week task list is endless, from ensuring renewal rates are accurate for the new month, to calling that one resident over and over before placing yet another eviction letter on his door – only to receive their payment the next day. It’s all hands on deck for many property managers to ensure they secure their rental income on-time, no matter what else is happening in the business. 😰
The Rent Week struggle hinders growth and profitability, especially when renters don’t pay after all your effort chasing. Worse still, the odds of late and non-payments increase when you don’t have the right tools. In 2020, 37% of landlords collected less than 90% of their total due rent value for that year (a 51.9% decrease from 2019). That’s a lot of cash and opportunity in the trash. 🗑️
Thankfully, there’s a better way to navigate Rent Week to ensure you get paid on time, every time, all while reducing your workload. In this article, we’ll take a quick look at how the Rent Week struggle began and highlight some common property management challenges caused by it. Finally, we’ll explore some technology and strategies you can leverage for a profitable and painless Rent Week.
Table of contents
- How the Rent Week struggle began
- Modern solutions to classic Rent Week challenges
- Rapidfire tips for nailing Rent Week like a pro
- Rent Week done right
Are sluggish payments holding your business back? Learn how Flex can help you skyrocket growth.
How the Rent Week struggle began
Rent Week (a.k.a., the week that rent is due from residents for the coming month) was set up to establish consistent cash flow for property businesses. This liquidity allows the property manager or landlord to cover operating expenses for the period and accumulate profits over time. For example, the residents pay you by the 5th of June, allowing you to cover the month’s bills and put some cash in your pocket. It sounds great in theory, but the reality is that the Rent Week system fails a lot with painful consequences. Here are just a few:
- Unsteady cash flow and financial losses: When you’ve got a small property portfolio, all it takes is a resident or two to pay late or default, and you’re in the red. 📉You’re then left scrambling to plug the financial hole, often with credit. This situation can be expensive and risky, eating away at your profits. Many landlords have faced this issue. In June 2022 alone, 15% of American households, around 8.4 million people, were behind on rent. Sure, you could evict residents that don’t pay. But when you consider the average eviction costs landlords $3,500 per eviction, it’s a good idea to avoid this problem in the first place.
- Rising payment delinquencies: 84% of landlords say residents’ inability to pay rent is one of their top concerns. But did you know the traditional Rent Week setup is a reason for late and rogue payments? It’s simply too rigid and doesn’t accommodate the different financial situations your residents encounter. Perhaps a resident works for an international company and gets paid once a month. If an unexpected bill comes up, they may not have the funds to pay rent and the additional bill (especially if they don’t have savings). Yet, if the resident can split rent payment, the scenario is more manageable, allowing you to secure rent.
- Wasted time and resources: Playing cat and mouse with late payers is exhausting and creates a huge opportunity cost. Let’s put this issue into perspective. It’s Monday morning, and you’ve got 7 unpaid rents. Yikes. You take a deep breath and begin the endless cycle of calling, texting, and emailing residents. Before you know it, the week is up, and you’re no closer to getting paid. So, you repeat the cycle, hoping to recoup your investment. Yet your to-do list and admin costs keep growing.💸This issue stunts business growth. After all, it’s time and money you could have spent on tasks like sales and marketing.
- Overwhelmed staff: Tracking incoming payments, making multiple calls to defaulters, and filing compliant paperwork are no easy feats. This is especially true when you’ve got to do it all manually during Rent Week. So, it’s easy for even the most efficient employees to lose steam. Overwhelm sets in, and other important tasks get tossed by the wayside. From here, issues start to arise from the incomplete jobs. Mistakes become more frequent as staff try to catch up, leading to employee disengagement and retention issues.
Modern solutions to classic Rent Week challenges
If the thought of tackling another Rent Week keeps you up at night, don’t fret; there’s hope. Thanks to innovative tech solutions, you can swap Rent Week dread for ease. Let’s take a look at some of the latest technologies and their pros:
Flexible payment solutions
Collecting payments is one of the most notorious property management challenges. But old-school rent collection tools like direct debits are a key cause of the problem. So, residents are calling for more innovative payment solutions. The response? Flexible rent. Technology now empowers residents to take control of their rent payments and gain a better grip on their finances. This shift is great news for operators as it means you can offer residents payment flexibility without putting rental income on the line. As a result, residents can better align rent payments to their finances, and you’ll still get full rent on time.
It’s why payment options like Flex are a hit, with 1 out of 5 property managers now offering Flex to expedite rent, a.k.a. revenue. Flex guarantees rent on the 1st of each month to housing providers. Using the Flex app, residents can split their rent payments into two manageable chunks. The service has nominal fees for users and no extra cost for the operator. Flex is also a set-and-forget solution. Users can adjust the second payment date as needed (subject to credit checks and terms and conditions).🎉
Some additional benefits of innovative payment solutions include:
✔️Increased on-time payments
✔️ Optimized cash flow
✔️ Higher net operating income
Tired of the Rent Week busywork? Discover how Flex can put your business in cruise control.
Data and analytics
Rent collection reports are among the most viewed data in the property management world. It’s easy to see why. Cash flow is the lifeblood of every company, and you’re not in business unless you’re getting paid. So, previously, trawling Excel sheets, sorting paperwork, and tracking essential dates by hand was the norm.
These days, you can use technology to do rent collection admin. That’s right. Pool data, extract key insights, pinpoint trends, and generate reports hands-free. For example, some solutions allow you to create reports on things like due payments and tenancy expiration dates on autopilot. Using these tools will free up significant time and energy. You can then redirect these resources to revenue-generating activities.👌
Some more benefits of data and analytics tools include:
✔️Faster data processing
✔️Better data visualization to spot opportunities, risks, and challenges
✔️Centralized insights to fuel data-driven decision-making
Whether you’ve got one resident or a thousand, using automation will let you navigate rent week stress-free. The trick is to let technology do the heavy lifting for you. These include collecting deposits, securing the first and last months’ rent, and completing onboarding administrative tasks like contract signing.
Some extra benefits of automation include:
✔️An upgraded customer experience
✔️Improved employee satisfaction and retention
Rapidfire tips for nailing Rent Week like a pro 💪
- Identify your most common Rent Week issues, then find solutions to solve them. For instance, if you battle delinquencies, use a flexible rent payments app with automated payment reminders.
- Ask current residents what they need to make rent payments quicker and easier and make their stay at your property more enjoyable. Also, send previous residents a survey to uncover what you could have done better to improve their customer experience. Then, implement the most frequent suggestions.
- Usher residents into your tech-driven future by announcing the new solution(s). Then, share short and simple instructions and encourage residents to use the tool(s). For example, imagine you want to avoid multiple messages from residents on how to pay. You could set up an automated text or email sequence and an FAQ explaining the payment options available and how to use them.
- Onboard and test tech tools before your next Rent Week to give you time to find the best solutions and iron out any kinks.
- Keep optimizing your tech stack for collecting rent as you acquire more data on what works and what doesn’t.
Rent Week done right 🥇
In property management, success or failure hinges on Rent Week. More worryingly, some property managers live the Rent Week struggle every month, resigned to the belief that it’s just the way things go.
The great news is that the battle doesn’t have to be your reality. There are now upgraded ways to manage rent payments and eliminate admin work while keeping your residents and staff happy and pockets lined. To see game-changing wins quickly, begin by optimizing your payment experience. With innovative payment solutions like Flex, you can take the pain out of Rent Week. You’ll have touchless rent collection and management. Plus, you’ll be able to offer residents flexible rent and boost cash flow risk-free.
So, don’t delay. Join the 1,000+ property management companies using Flex to conquer Rent Week today. Book a demo.