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5 Proven Best Practices to Increase Digital Rent Payments

In today's episode, we chat about the power of digital payments in enhancing the resident experience in multifamily properties. Learn about five proven best practices that can propel your properties to achieve 100% digital payment adoption - supported by data pulled from Zego's latest research. Tune in for a mix of practical tips and stories on empowering your multifamily operations and enhancing your residents' payment experience.

Listen to the episode below and subscribe to The Resident Experience Podcast for more episodes.

Driving Digital Rent Collection For Your Properties

Introduction (0:00 - 01:09)

The Drive for Digital Payments (01:10 - 02:25)
Discover the compelling reasons behind the push for 100% digital payments in the multifamily sector. Yolanda and Charles discuss the reduction of office paperwork and the ease for residents, underlining the importance of adapting to digital methods for efficiency and resident satisfaction.

Enhancing Payment Accessibility (02:26 - 04:32)
Learn about the importance of offering diverse payment options and the impact of fee structures on digital payment adoption. This segment reveals how multifamily properties can significantly increase digital rent transactions by providing multiple payment methods and considering the financial implications for residents.

Communication and Automation (04:33 - 06:21)
Explore how automated rent reminders and effective communication strategies can lead to higher digital payment utilization. The hosts share insights into the psychological benefits of reminders and how they can streamline the rent collection process.

Technological Integration and Resident Engagement (06:22 - 08:27)
Yolanda and Charles emphasize the role of technology in facilitating digital payments, discussing the advantages of integrating payment systems into resident portals and community apps. They highlight how ease of use and seamless integration can improve resident engagement and payment consistency.

Cultivating a Digital Payment Culture (08:28 - 12:06)
Dive into the strategies for promoting digital payment methods among residents, including the implementation of resident awareness plans and incentive programs. The segment covers practical steps for property management teams to encourage the adoption of digital payments through education and rewards.

Conclusion (12:07 - 13:39)
The episode wraps up with a reflection on the importance of embracing digital transformation in the multifamily industry. Yolanda and Charles encourage listeners to leverage the insights and strategies discussed to improve their property management practices and resident experiences.

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The 2024 Rent Payment Trends Report

Learn the most effective methods to increase digital rent payment usage amongst your residents with our 2024 Rent Payment Trends Report. Based on research into our own user data, this free report details the top 5 data-backed ways management companies are digitizing their rent collection cycles.
Download now

Episode Transcript

Yolanda Muchnik:
Hello multifamily pros, and welcome back to the Resident Experience podcast. I'm your host Yolanda Muchnik.

Charles Buggs:
And I'm the co host, Charles Buggs.

Yolanda Muchnik:
Today I am extra excited because our team here at Zego released some new research a few weeks ago and it's a must read before you turn away. Don't worry, this is not a promo or advertisement in any way. What we're talking about today are five insights covered in our report and how they can help you reach 100% digital payments at your properties.

Charles Buggs:
Absolutely. You know, this topic about driving 100% digital payments is something we discuss with our customers all of the time, even when thinking about accommodating unbanked residents, those who prefer to use a check. Today, our focus is to give these five tips.

Yolanda Muchnik:
What we're talking about today are five insights covered in our report and how they can help you reach 100% digital payments at your properties.

Charles Buggs:
100% sounds amazing and 100% digital payments is something we talk to customers about all the time. It's our bread and butter. It makes sense to get checks out of the office. But I think today these five tips and best practices on how to activate residents to pay online are going to be super important.

Yolanda Muchnik:
Exactly. So let's get into it. First, best practice is to offer a mix of payment types to increase digital payment transactions. In our report, we highlight digital transaction growth for one of our customers with a 19,000 unit portfolio over a one and a half year time span. And in it you can clearly see how with each new digital payment method added, transaction count grows from 5,000 transactions per month to ultimately 13,000 transactions per month. That's 8,000 fewer paper based transactions our client has to process each month just because they've added more payment methods.

Charles Buggs:
Absolutely. And I think it's something important. I'm not going to name any names, but this trend is relatively set. I think that most people who are, let me say it like this, think about it practically, right? If a customer wants to pay you with PayPal, Venmo, any other form of digital payment or check, or however, giving them more options to give you the money that you're charging them only works to your benefit. And I think by us kind of playing with those strings a little bit and fine tuning it and making it so that process is easier for the customer and not harder, only works to everyone's benefit.

Yolanda Muchnik:
Totally consumer choice, super important, and it absolutely works in your favor. So number two, best practice from our research is that companies who offer free ACH payments have noticeably higher digital payment utilization fees are a huge contention point for renters. I'd say it's one of their top complaints. And when we looked at mid market multifamily portfolios, there was a dramatic trend here.

Those that incurred fees had an average digital utilization rate of almost 85% versus those who didn't, who had a utilization rate of 47%. That 47% is there simply because the residents themselves had to pay the fee. So it just shows you what a difference it makes.

Charles Buggs:
Absolutely. And I think it comes down to that fundamental of incurring versus passing. Not to get too in the weeds on that, but just like on a surface level, when we think about as a consumer, right. I think you said in prior episodes how you related to the point we made because you were a renter at one point, right. And I think we all have to remember that we are consumers in this space a lot. Like, I don't know what the exact number is, but a good amount of us, especially in California, are renters.

And I think that we have to remember when we're interacting with people and especially when we're collecting money from them, giving them a path that makes it easier for them to pay you, just makes sense. So incurring ACH, which is probably one of the most common ways to pay, and making sure that your residents have that option to be free, will dramatically increase and also decrease the amount of the checks you're going to get in the office. And I for one, remember processing those checks. I remember that sound of the check scanner is like implanted on my brain.

It's something you'll never get rid of. Right. So any way I can help somebody not have to go through that and actually get to help residents without doing some mundane task that really someone should be doing for you, in the sense of the residents applying that payment to you digitally, I'm here for it.

Yolanda Muchnik:

Charles Buggs:
I think that's super important.

Yolanda Muchnik:
Agreed. All right, so best practice number three is another one that seems logical on its face, but so many don't do it and it's sending automated rent reminders. This jump isn't as dramatic as free ACH, but it's still significant increase. So one of our closest partners, Rent Manager, corroborates this claim with their own data. And it shows that their customers see an average of 13% higher digital utilization when they use automated rent reminders.

Charles Buggs:
Absolutely. I think this is kind of some low hanging fruit, right? Because a lot of systems that we use day to day are going to be kind of built in with these. Some people call them triggers, automations, however you want to phrase it. But these gentle nudges to the customer to do an action to take a step that you want them to take next in their process. Right. So if we're talking about rent, rent is probably the biggest expense that most people have, and they also know when it's probably coming. So we think and take for granted the fact that we know when someone should know when to pay. We know when someone should know when to come into the office, when they have an issue and all these things we assume.

But making something a little bit more black and white apparent will absolutely help in this effort. I think when we're looking at different apps or different avenues just to display that. I remember getting questions from someone who's lived there for years and they come in every single month and they ask me what their rent amount is. It's a weird thing, right? And it's just something that we should really feel and understand and empathize with to actually make positive change.

Yolanda Muchnik:
Yeah. And I think this all just ties back to the human element of needing reminders. Like, I need reminders to attend meetings, I need reminders to make phone calls. We just all need a little nudge every once in a while. And this is a simple step that property management companies can take to really see some dramatic results. So the fourth best practice that we talk about is a little bit more under the radar.

And it's offering both a traditional resident portal for payment as well as a community app. So what does this mean? It's having both a traditional website where residents can go to make their payments and also tying in the ability to make those payments via some sort of app. And the gold standard here is obviously offering a full resident engagement app where renters can manage all their day to day tasks, aspects of their multifamily living.
But that also includes the biggest portion of their task at living in your community, which is, of course, paying rent.

Charles Buggs:
Absolutely. And I think when we're looking at different examples to highlight, and we're looking at just what technology working together can do for you, this just is. Again, I'm going to use the term low hanging fruit, and it makes sense. It's applicable to how everything else in our life works. When you think about rent payments, the only industry that expects a check still is the multifamily industry. And I'm not saying that's good or bad, right or wrong or any of that. It's just one of those things where it's always like this little lag.

And so when we start talking about apps and resident portals and making things just digitally easier and more attainable and more visible, it all just makes sense. So, thinking back of an example, there was one customer, I think it was six months after launch, we went from 57% to 79% in payment utilization. And that came from us having integrated rent payments into his existing company app. Previously, it was a little bit fragmented, of an experience where they had something over here, something over there, third party link that took people out of the app altogether.

And it caused a little confusion because different landing pages people are putting in their credit cards. If things change, it doesn't look right, they're going to defer to say, you know what, I don't want to deal with this. I'll just bring them a check or a money order when I get off of work. So the ease of use, the visibility and all these different factors play into it. And digital apps, digital portals all make sense.

Yolanda Muchnik:
That's right. And so, drumroll for our fifth and final best practice, which is implementing and onboarding a resident awareness plan.

Charles Buggs:
Resident awareness plan is so important, and it almost seems obvious, right?

Yolanda Muchnik:
Yes. But also no. It's human nature to really get bogged down with implementation. And while the benefits here might seem super obvious, often this piece of the rollout process just gets shortchanged. Just like any initiative, it's important to enable and sell your residents on the benefits of paying digitally in order to kick start those changes in their behavior, the ones that you desire. Right? So think about what's in it for them. How can you raise awareness of their options?

And maybe gamify things a little bit to help them establish those new habits that are ultimately going to be really valuable for your property management company.

Charles Buggs:
Absolutely. And I think that's important to know because I think sometimes we launch these new things and we get a lot of training, a lot of information, a lot of the why of why this cool new thing is going to change everything for us. And then it launches and it has kind of like this lull or something that we don't expect or maybe an expected thing that they expected to work a certain way for you, but it doesn't actually play out in the reality of how your business works.

So definitely taking time to kind of work on your expectations and understanding that sometimes you're going to be kind of scaling as it's active and as you figure out what works, what doesn't, what spin you want to put on things and how you're going to get there, all of those different paths and avenues make sense. And I think some examples we've had, we've had residents using little raffles, giveaways.

You pay your rent digitally, enters you into a raffle or gives you a raffle ticket over a period of time. A good vendor in this space will be able to help you accomplish those end goals and partner with you to get those contests, whatever, put into the marketplace with your residents and help you see through success. And I think that's something that should be consistent along with your reminders and paying rent throughout the year.

Yolanda Muchnik:
Yeah. And there's so much more we could talk about when it comes to this. But for our listeners, I hope you heard some tidbits that got you thinking. And if you're interested in delving into some more of the finer details and the data behind today's discussion, we have a link to the ebook that we're talking about today on our episode page.

Charles Buggs:
Absolutely. I'm so excited about that ebook. I'm actually going to leave this meeting and go read it right now. Don't go away yet, because I think along with the good news of our ebook, we also want to get into some other good news. Isn't that right?

Yolanda Muchnik:
Yeah. I think the good news is next.

Charles Buggs:
Good news. It's the good news.

Yolanda Muchnik:
I want to introduce to our listeners to a new segment we're starting at the end of each episode moving forward called the Good News. Go to our show bio on any platform or at the top of our podcast page on our website and you'll see a link. To contact us here at the show, click on that link and share your good news with us and we'll highlight it on the following show. Good news can be anything. A successful initiative, a fantastic resident review, or even a shout out to a work colleague or a friend. You can even promote yourself. There's enough stress and anxiety in multifamily. So help us shine a brighter light on what's going right.