Using Modern Technology to Get Rent Paid on Time
Can your smartphone get tenants to pay ontime? Maybe, maybe not — but their smartphone sure can!
Property managers, including DIY’s, can get pretty busy — and one of the most delicate yet important parts of our job comes at the beginning of every month as we make sure that each of our tenants pays their rent on time — and in full. We do everything possible to nudge slow payers and prevent delinquencies, from sending out reminders to incentivizing early rent payments or penalizing late payments. It turns out, however, that one of the easiest ways to get people to pay rent promptly is to make paying as easy as it can be.
The Marketing Workshop released a survey a couple of years ago that spoke to the ways that Americans prefer to pay their bills. The study revealed that not only did people have a whole slew of options available to them for paying bills, they actually used a wide variety of them on a regular basis — and they were steadily shifting to the options that allowed them to pay online and via their mobile devices. To wit:
- 1 in 5 Americans used a different method to pay the same bill each month than they did the previous month.
- 1 in 5 Americans with smartphones used a mobile-friendly method to pay a bill at least once a month.
- 3 in 4 Americans used at least two different bill-paying methods each month.
- 3 in 4 Americans said that having several billing and payment options was “important” or “very important” to them.
- 3 in 4 Americans with Internet access used an online payment method to pay at least one bill every month.
In short, diversifying your payment methods is good for business, and in specific, adding online and mobile-friendly rent payment methods is particularly good for business. In both cases, they’re good for the same reason: if you make it easy for people to get the money to you, they’re more likely to get it to you on time. The world’s swift transformation to digital bill paying has been nothing but good for bill collectors, according to the study above, because it also revealed that:
- People who pay bills online fall behind 1/3 less often as people who don’t (6% vs. 19%).
- 1 in 4 people who didn’t use the Internet regularly said they had issues paying bills because they lost track of them — vs. only 7% of Internet users.
- 7 in 10 Americans who used electronic services said they preferred digital billing because it was convenient; 5 of 10 also added that they enjoyed the speed with which they could pay their bills digitally.
So you should look into some digital payment options. PayPal is one of the easiest to use, but also one of the most expensive. There’s also Square, Dwolla, Paysimple and a slew of others available. Just be sure they’re easy to use for your tenants, more so than for you and also be sure you know all the costs involved.
The chances are excellent that your tenants want to pay their rent online or via a mobile solution — and if you allow them to do so, you’re going to get not just less missed payments, but less late payments as well. It might take a little bit of investment to get a proper online/mobile friendly bill pay method up and running, but the results will most likely be quite worth your time and effort.