Electronic rental payments are a win/win for both renters and property owners. For renters, online rental payments are much easier, more convenient–and safer–especially during these pandemic times. Online rental payments help renters securely pay their rent on time, avoid late fees, reduce stress and limit contact with people. Meanwhile, owners receive their monthly rental income as quickly as possible, so they can take care of the expenses they must pay to keep their property running smoothly, such as a mortgage, utility bills, property taxes and more. Property owners also prefer online rental payments because they’re the fastest way to collect monthly rental payments from renters.
Paying rent the old-fashioned way–via a personal check that requires a stamp and envelope–is time-consuming, tedious and inefficient. Paper checks are much slower than e-payments. Generally speaking, they take at least five days to clear, and involve significantly more manual work to process. Oftentimes, an essential worker from a property management firm risks life and limb by going out in public to collect the check, figure out which rental unit to apply the funds to, and in some cases, make a trek to a bank to deposit the check.
E- rental payments provide residents with a stress-free, time-saving experience that helps them avoid late fees and mitigate anxiety. Put simply, “Paying rent online allows residents to hit the ‘Easy Button,’” explains Steve Rozenberg, Head of Investor Education with Mynd Management. “It makes their lives much easier.”
A good property manager implements a multi-channel outreach program via digital and print campaigns at the onset of their lease term and throughout the course of their occupancy. According to Kunal Shah, VP of Product for Mynd Management, one effective marketing technique for his firm has been to send flyers in the mail to people who are paying by check with step-by-step instructions and visuals to get their online account set up to make e-payments.
“We are always trying to help our residents move to e-payments to avoid late fees and avoid the headaches of manual paying,” says Shah. If worth their weight in salt, that same property management firm is also available to answer any questions about how to create a user account via email or an online portal.
A tech-forward property manager makes paying rent simple and seamless by developing an easy-to-use residents portal. Providing a user-friendly portal or website that allows renters to use any type of device to pay their rent: a mobile phone, iPhone app, Android app, PC, laptop, desktop, etc., is they key to making online rental payments simple and accessible.
As part of this portal, a tech-savvy property management company should have the ability to accept all forms of rental payments on the back end: ACH, as well as all major debit card and credit card payments.
Short for Automated Clearing Housing, the ACH is a clearing and settlement house that facilitates network-to-network electronic financial transactions. In other words, it’s a safe and secure way to move money between banks without the use of paper checks, credit-card networks, cash or paper checks.
Tenants can rest assured when using the ACH to pay their rent: The organization certifies that the money is insured by passing through the Federal Reserve. According to the Nacha Network, an electronic payment system that safely and reliably moves tens of billions of payments annually, electronic payment volume reached nearly 23 billion payments in 2018, a year-over-year increase of 6.9% and the highest growth rate since 2008. That equates to nearly 70 payments for every person in the United States.
A study issued by the Identity Fraud Consumer Report states that online banking and bill-paying are considered safer than paying by check. The report goes on to assert that consumers should use electronic statements and online bill payments “whenever possible.”
Additionally, paying rent online eliminates the chance of bank information ending up in the wrong hands, which can happen when a paper check doesn’t reach its intended location.
The Balance Small Business confirms that online rental payments are the best option for landlords.
Besides making it easy, safe and secure for their residents to pay rent, a top priority among leading property management firms is to collect their owners’ monthly rental payments as quickly as possible and distribute them whenever they would like to receive them. That includes giving property owners the ability to select how often they receive their monthly rental income, or distributions. Some owners prefer to receive distributions once a month or once a quarter, for instance, while some owners want to receive their distributions weekly.
“At Mynd, our weekly distribution cycle is intended to get our owners their money throughout the month as soon as it arrives in our system,” remarks Shah.
When a property manager receives a personal check in the mail, there are so many manual steps that must be taken to clear that check and deposit into an owner’s account. A rental manager’s accounting team has to see if it is managing any expenses for the owner, or if it has to pay a vendor. A property management team must also check to see it needs to put money aside for the owner to pay their property taxes. “In short, there’s a lot of manual processing from when the money is sent to us until we can get the distribution to the owner,” Shah says.
“With an ACH payment, rent payment can clear within 48 hours and gives us more time to get that processing done,” notes Shah.
The security, safety and well-being of renters and owners should always be the top priority of a qualified, tech-savvy rental management company. Whether we’re living in pandemic times or enjoying a thriving economy, collecting rental payments electronically is one of the best ways to create happy homes and healthy investments.