Why Online Rental Payments Will Now Dominate
Paying rent used to be somewhat of a chore in the days before most people had a computer and a smartphone. Those with checking accounts had to write out a check each month and either deliver it to the rental office in person or send it in the mail. People without checking accounts had to obtain cash, go to a post office or bank to get a money order, and then deliver it in one of the same two ways.
As technology advanced, so did the expectations of renters. This was especially true of Millennials and members of Generation Z accustomed to both technology and convenience. Smart property managers knew they had to at least make it possible for people to pay their monthly rent online, if not through their smartphone. Both parties benefitted from faster payment processing, increased security, and convenience. The online payment trend was already increasing rapidly even before the coronavirus pandemic arrived.
Social Distancing and the Need for Contactless Payment Options
When the pandemic arrived in the United States in early 2020, the old way of processing payments became nearly obsolete with little notice. People were now wary of touching anything that other hands had touched, including checks and money orders. Due to social distancing requirements, rental office staff could not help as many people at one time as they did before the pandemic.
Although a vaccine recently became available, it could be many months before everyone who wants to receive it has the opportunity to do so. That means social distancing and using contactless options whenever possible is here to stay for a while, making online and smartphone rent payment options especially attractive.
A Closer Look at Traditional Rent Payment Options
Low-income renters are less likely to have a bank account, forcing them to pay by cash, check, money order, or cashier’s check. Of these options, property managers tend to prefer money orders or cashier’s checks due to the traceability and guarantee of funds. Since residents usually have to pay a fee to obtain certified funds, this option is not as attractive to those with reduced income. A personal check can bounce while cash payments are difficult to trace.
Despite these potential downfalls, property managers serving a primarily low-income clientele may have no choice but to make these options available. At the same time, they can gently steer renters towards more convenient ways to pay their monthly rent.
Electronic Rent Payment Methods
Property management companies that accept credit cards and do not charge a fee for it are popular with renters. Not only is this option convenient, but most credit card companies offer rewards points for every dollar spent. There is also the option of renters setting up recurring monthly payments. Although this is convenient for property managers, they need to consider whether they can absorb credit card transaction fees or must pass that along to tenants. An automated monthly withdrawal from a bank account is another option, and it is free for both parties.
Using a payment application either online or through a smartphone seems to be the wave of the future. Property managers who go this route should consider using a payment platform and integrating it with their current tenant management system for maximum efficiency and accuracy.