What you need to know about the best way to collect rent online
The best ways to collect rent online give you tools and features to fully digitize your rent collection process and eliminate paper payments. Find out what they are and how to use them to improve the way you collect rent.
What is the best way to collect rent?
As an apartment operator, you’ve probably wondered: “what is the best way to collect rent online?” After all, collecting rent is the most important operational aspect of your business. And simply having rent payment software doesn’t always mean 100% online rent payment adoption from your residents. Unfortunately, many companies don’t have effective practices in place for taking rent payments. This causes revenue to suffer and, in many cases, unhappy residents & staff.
Of course, you don’t want these unintended consequences. So it’s important to make sure paying rent is a convenient process for your residents while providing the right operational benefits to your company.
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Want a more efficient rent collection process?
Download The Property Manager’s Guide to Common Rent Payment Mistakes to identify ways to improve your rent collection process & get paid faster.
5 Reasons why PropTech solutions are the best way to collect rent online
The majority of property management companies find that using PropTech software is the best way to collect rent online. PropTech software enables you to accept digital payments while providing additional operational perks that make rent collection easier.
Digital rent payments give you a long list of benefits which is why they are the preferred over paper payments. And when a high percentage of renters pay digitally, the impacts are substantial.
So how do you know if your PropTech solution is the best way to collect rent online? The right digital rent payment platform will give you the following 5 benefits:
1. The best ways to collect rent online result in faster cash flow
Rent cycles move a lot faster when they are digitized compared to manually processing your payments. That means funds hit your bank account sooner.
When all or most of your renters pay using your rent payment software, you’ll have access to your funds sooner than if they mail in paper checks. Plus, AutoPays and automatic rent reminders increase your percentage of on-time payments. That gives you a domino effect of efficiency and profitability!
2. A good payment experience for residents
Do your residents ever complain about it being inconvenient to pay you? Do they fumble through your payment platform and decide to write a check instead?
If you answered “yes” to either of those, then you probably don’t offer the best way to pay rent online. The right PropTech solution will give renters a smooth payment experience. This is really important because it impacts resident satisfaction.
Paying rent is a recurring interaction your residents have with you every month. Residents (particularly Gen Z or Millennials) have high standards about online transactions with your company. It has to be convenient for them and give them the flexibility to pay how they want.
If they are inconvenienced each time they make a payment, their frustration will just grow over the course of their lease. And, that may mean they find another community when it’s time to renew their lease.
3. Reduced workload for on-site teams
You want your teams to focus on resident satisfaction and securing new leases. But processing paper rent payments or dealing with a subpar rent collection services keeps them from those priorities.
If you’ve found the best way to collect rent online, your teams aren’t spending time on low-value tasks like entering payment data into your systems or hauling checks to the bank. You also don’t want them rectifying transaction errors that could have been avoided in the first place. They can devote more time to the activities that help your company in the long run.
4. Better visibility into resident payment data
Pulling and analyzing data is a lot harder to do when you’re manually processing paper checks. Or, if you have a digital payment solution that does not offer seamless integration or customized reports. The best ways to pay rent online have comprehensive reports that let you quickly find what you need. Bonus points if they point you towards any trends with your payments.
5. Fewer instances of theft or fraud
Paper-based payments are easy targets for loss or theft. Checks, cash, and money orders are commonly lost while in transit to the bank. And, thieves often target rent drop boxes to steal checks.
If you have the best way to pay rent online, you’ll see fewer instances of theft or fraud. That’s because digital payments are safer than paper-based ones and less prone to fraudulent activities.
There’s another reason, too. The best digital payment partners also offer services intended to stop nefarious activity. They’ll ensure the bank accounts that residents use are valid before a transaction can run. And, in the event of a chargeback, they’ll fight the case on your behalf.
What are the best software features for collecting rent online?
You might already be collecting rent payments online. After all, there are many solutions on the market designed for multifamily rent payments. But some solutions lack key features that help you collect rent efficiently. If you want to have the best way to collect rent online, your solution needs to provide the following features:
Payment options beyond ACH and credit cards
When you offer digital payment methods, your residents will usually opt to debit their bank account (ACH) or use a credit card. But there are other digital payment options you need in your lineup. That way, all of your renters’ payment preferences are available.
An important payment choice to have is a CashPay solution. CashPay solutions cater to renters who need to pay with cash or a money order. And since 1 in 10 adults is unbanked, you need a way for them to pay you digitally. Here’s how it works:
Solutions to convert paper payments into digital transactions
Most property management companies still receive checks every month even if digital payments are an option. In fact, the Federal Reserve Bank of Boston found that 58% of rent payments are still paper-based payments. The best ways to collect rent online will offer solutions that convert any checks you receive into digital transactions.
One way to do this is with lockbox services. Take Zego PayLockbox, for instance. This service has renters mail their checks to a PO Box. The box is monitored daily by our payment processors. Any checks received are scanned and integrated into your Zego portal.
This is a key feature because it saves your on-site teams from manually processing them. That’s a big time saver for your associates. Plus, converting your checks into digital transactions will speed up your funding time.
Mobile CheckScan is another feature that helps you convert paper payments into digital transactions. It’s a simple process that is easy for renters and relieves on-site associates from processing checks. With a Mobile CheckScan solution, residents use their community app to make a payment. They take a photo of their check and the bank account information is automatically captured for an immediate payment. Residents can also save the account information for future payments or recurring AutoPays.
Easy and convenient for residents to use
The best ways to collect rent online make it extremely easy for renters to pay you. If making a payment online isn’t easy, then why would renters want to? They shouldn’t struggle with how to use your rent payment platform or have to jump through several hoops to initiate a payment.
The less that’s required for renters to make a payment, the more satisfied they’ll be. When it’s easy for them to pay electronically, they’ll be more inclined to keep paying that way. And that translates to a higher digital payment adoption.
Renters save time with AutoPays and rent reminders
AutoPays are a perfect example of making it easy for your renters. When they make a payment through your payment platform, they can sign up for an AutoPay schedule. From there, your payment platform works on their schedule and renters never have to worry about making a payment on time.
Automated rent reminders are great for renters too. Renters automatically get a text or email reminder that rent is almost due. The reminder gives them a link they can click on to initiate the payment. And boom – they’re all paid up!
The best ways to collect rent online include mobile apps
When you think about the best way to collect rent online, you might envision renters making payments from their computer. But more and more, renters use a community app to pay rent.
That’s because apartment communities frequently have apps for residents to control aspects of apartment living. Activities like filing a maintenance request, getting package notifications, and reserving amenities are commonly conducted within an app.
That said, residents need to be able to pay rent with their app, too. Since residents already engage with these apps, they’re much more likely to pay their rent while they’re in there. And, it’s a particularly easy process because they are already logged in and can access their payment data with one tap.
Mobile apps increase digital payment utilization
It’s not just a perk for residents to pay in an app. Communities with a mobile app tend to see higher digital payment adoption than those without. Our client, S2 Capital, bumped their digital payment adoption up 27% after they implemented their community app! So if you don’t have a community app and want to drive digital payments, it’s definitely worth the investment.
More advice on the best way to collect rent online
There are a lot of considerations when you’re determining whether you have the best way for renters to pay rent online. Our new ebook covers what to do (and what not to do) when you collect rent. Download your free copy of The Property Manager’s Guide to Common Rent Payment Mistakes & How to Fix Them now!