Assetsoft - Blog #rent payments

How To Combat Late Payments Through Property Management Software?

Fri, 01 Oct 2021 08:00:00 -0500

Collecting rent is one of the most problematic parts of being a property manager. More than 20% of renters in America are nearly 4 months behind on their rent payments. That is $5600 worth of rent per delinquent tenant.

Traditional payment methods do little to solve this problem. While micromanaging rent payment is tiresome, leniency can cause too many missed rents. The final step is to carry out an eviction, which can cost up to $7000 for the property manager.

A better solution is to leverage property management technology to streamline rent collection. With the right technology, you can make sure every tenant pays you on time!

If you are unsure how, read the below tips and combat late payments effectively.

Automate tenant screening

Ensuring timely rent payment isn’t a month-end process. Instead, it starts with the beginning of the tenancy itself. A study by Harvard University found that nearly 50% of tenants couldn't afford their rent due to low income. A thorough tenant screening can help determine the affordability for each renter.

The screening process needs to verify basic requirements such as credit score, eviction history, and criminal record. Verifying income and employment should be a priority as a tenant can only pay rent when they can afford it.

According to a survey by the US Census Bureau, spending more than 30% of income on rent is considered a financial burden. While this isn’t the sole determinant of housing affordability, it is wise to choose tenants who spend around the 30% threshold.

Additionally, you can know the tenants' payment patterns through their credit scores and eviction history. In 2020, the average credit score among renters in the U.S. was 638. Credit scores show how promptly an applicant clears their dues, including rents.

A tenant with a bad credit score can potentially fail to pay rent on time. Eviction history also works similarly, by showing the behavior of an applicant during previous tenancies.

Automating tenant screening through software like Yardi ScreeningWorks Pro helps you select low-risk tenants.

Online rent payments

Online payments can help you tackle late payments simply through their convenience. New generation tenants prefer online payment methods with millennials paying 61% of their bills digitally.

Giving your tenants their most preferred payment option will automatically help them pay rent on time. There are several options like bank transfers, e-wallets, or credit cards that can be used to complete these transactions.

Mobile payment options are also an added advantage. Nowadays, almost every tenant has access to a smartphone. Through mobile apps, tenants can complete their rent payments anytime. Making payments convenient for the renters reduces the chances of late payments.

Digital payments are also convenient for property managers. You don’t have to go through your mail for payment checks or visit the bank to cash them. Funds are transferred directly to your account, which means you get real-time updates whenever someone pays their rent.

Send out payment reminders

Most tenants don’t intend to miss out on their rent payments. Sometimes people are busy or they simply tend to forget. In a Citi Bank survey, 61% of delinquent tenants blamed forgetfulness for late payments.

Setting up reminders is an excellent way to collect timely rent from forgetful tenants. But manual reminding each tenant about their due rent takes too much time and effort. A more convenient way is to use property management software to set up email or text reminders.

You can automate these reminders for the first of every month, and also carry out sending them multiple times till the rent is paid. Text and email reminders are documented, which means they can serve as evidence in case an eviction becomes inevitable.

Set recurring payment options

Setting up automatic payments is another benefit of property management software. Tenants who don’t want to go through the monthly hassle of rent payment can use these options.

Setting up recurring payments does not require extensive technical knowledge. Initially, tenants need to feed their payment details such as credit card information to the software.

Then, they can set their payment dates and choose to get transaction notices in their mail.

A recurring payment is the best way to ensure timely payments. It is not only beneficial for the property manager, but also for the tenant. Since these transactions are online, they can be easily documented as well.

Utilize tenant portals

Constant communication is important to maintain a healthy relationship with tenants. Tenants who have a good connection with their property managers are more likely to pay rent on time. Effective use of tenant portals for tenant communication can ensure that every payment reaches you on time.

The use of these portals is not limited to sending or receiving messages from tenants. They come with a wide range of features such as tenant account management, document transfer, and much more.

Property managers can keep a track of the renters’ payment history, check the frequency of late payments and send text warnings to tenants if necessary. Similarly, tenants can also check due dates, update payment methods and communicate any delay with their property managers.

For tenants, keeping up with these announcements and checking their rental agreement also becomes easier. Any incentives and penalties can be shared through these portals. By giving incentives for timely payment, you motivate more tenants to pay on time.

Make rent payments easier through Assetsoft

Leveraging technology can help reduce the number of late payments you receive. Assetsoft helps you find the right option to streamline your rent collection. We have several options such as tenant portals from Yardi and MRI, online rent collection through Zoho Books, and much more.

For more customized software, our expert team can work with you to integrate suitable features. Our support extends beyond integration with services like training, troubleshooting, and data transfer.

We can also help you streamline your business and improve your strategy through our consultation services. With Assetsoft, you will find complete tech solutions for your property management business.

To streamline your rent payments, contact Assetsoft!

8 Reasons to Upgrade to Online Rent Collection

Thu, 29 Jul 2021 08:00:00 -0500

Ever had tenants who always paid their rent on time? Such tenants are an asset but are also not very common. For property managers, rent collection is one of the tiresome aspects. More than 50% of Americans make late payments due to job loss, financial problems, or simply because--they forget! And with traditional payment methods, property managers have to also deal with payment defaults and bounced checks.

Online rent payments can eliminate many of these problems. This is true not just for property managers but also for tenants. According to NAA, 79% of tenants prefer to pay their rent online. Apart from this, this article will tell you several other reasons to upgrade to online rent collection.

Simpler payments

Traditional payment options like checks have many time-consuming processes. From receiving the check by mail to finally cashing it at the bank, it usually takes several days. But online payments are simpler. Tenants can pay their rent every month with only a few clicks through their phones. This saves the time of both property managers and tenants. Digital payment methods are also easier to set up, which is why most of the tenants prefer paying online.

Multiple options

One of the common digital payment methods is bank transfer. Apart from that, tenants can choose from several options like debit cards, credit cards, and pay-from-phone services. Some providers also give offers and discounts on transactions made through their apps. Tenants have the flexibility to choose the option most convenient for them. By giving them a variety of options, you can receive more payments on time.

Some property management software also has a payment processing feature. Yardi’s payment processing allows tenants to pay rent through simple browser-based and app-based options.

Real-time tracking

Payment through checks takes a long time to process. There is also a risk of the check bouncing due to a lack of funds. But with online rent payments, there is almost no risk of payment failure. You can receive real-time notifications every time a tenant pays rent. This helps you keep track of all the payments you received. Similarly, tenants can instantly know if their payment is successful. In case of failure, they can try again or choose a different payment option.

Schedule recurring payment

When you have multiple tenants, reminding each of them to pay rent every month is tedious. Through digital payment apps, you can send reminders to all tenants at once. You need to schedule these reminders once, and your tenants will automatically receive them every month. For example, if you collect rent before the 5th of every month, then you can schedule reminders to be sent on the 1st. This reminder is repeated so you don’t need to set it again every month.

Tenants can also avoid late payments by setting up recurring payments. These options transfer the rent every month through credit cards or account transfers.

Go paperless

Online rent payments do not require any paper invoices, receipts, or any other paperwork. According to The Chicago Tribune, 2.2 billion sheets of paper are used for mortgage paperwork alone. You can reduce the environmental impact of the real estate industry by using digital send invoices and receipts. Most online payment methods generate e-receipts and avoid unnecessary use of paper. Accepting online rent payments is one of the essential steps to a paperless real estate industry.

Secure rent payments

A 2020 report by Wall Street Journal states that check frauds make up 47% or $1.13 billion of the total bank frauds. Checks contain a lot of confidential information which can be easily stolen. Online payment gateways are more secure as sensitive information is not public. It is also easy to track all the transactions made online. So if a tenant has not paid rent, then you will have proof. It will also ensure that any payment is not “lost”, which is also a common reason cited for late or missing payments.

Minimal errors

If you have multiple tenants, you might lose or mishandle a check. It is also difficult to keep track of the tenants who have paid and those who have not. Or you might have missed collecting the late fees. In any case, checks are prone to simple errors. But with online payments, all the transaction details are recorded. You can check your account to know who has paid and at what time. You can also spot tenants who have been regularly missing payments. By using RPA tools and accounting outsourcing, you can easily organize the transaction records of your properties.

Transparent rent collection

If you have increased the rent or want to collect late payment fees, you can do so easily online. You can provide a breakdown of the rent to the tenants for better clarity. With online platforms, you can also maintain a record of the late payments, rent increases, and any other charges paid by tenants. This will make the system more transparent as every transaction is accounted for. For example, if a tenant has missed their rent payment, you can add late payment fees to their regular rent through rent collection apps.

Apart from general online payment apps, property management software also has features for online payments. These platforms have additional features such as scheduling recurring payments and managing financial data. For the real estate industry, choosing software specific to property management can make the process much easier.

How Assetsoft can help

Liked the idea of going digital with rent payments? Assetsoft can turn this idea into reality. We aim to help our clients automate their property management processes through software integrations. Some of our most popular platforms like Yardi and MRI software have their own payment processing tools. Some also have individual tools intended for rent collection. We can help clients decide the best software according to their requirements. Assetsoft understands that no two businesses are alike and hence, provides custom software integrations through platforms like UiPath. We also provide outsourcing services for finances, back office, and software support.

To know more about our services, book an appointment with Assetsoft!