Electronic Rent Collection: Direct Deposit
The prevalence of online rent payment services should continue to explode in the coming years, due to a number of factors affecting the market. Continued economic uncertainty means that young adults and families regard renting as a safer option when compared to purchasing a home. In addition, the ongoing transition to digital commerce means that his generation views online rent payment services as the obvious alternative. Landlords also gain benefits from instituting online rent payment services for their tenants.
Once thought to be a logistic nightmare, online rent payment services have firmly entered the mainstream. While many industry watchers believe the transition was inevitable, a number of factors have played a role in quickening the pace of this change. A prime cause in the move to online rent payment services has to do with the country’s changing demographics, as survey after survey shows increased interest in renting as a preferred way of life.
For example, online rent payment services are tailor made to suit members of the Millennial Generation, who are now firmly ensconced in their renting years. Whether they are entering college, seeking to enter the workforce for the first time, or settling into marriage, this group of Americans lives a mobile life – both geographically and digitally. They expect to rent for years, perhaps decades, to come, and they expect to be able to handle their entire social, business, and bill-paying tasks from their mobile devices.
In fact, a survey by the National Apartment Association found that online rent payment services topped a list factors that influence this generation’s decision regarding whether or not to rent a particular unit. One a five-point scale, with 1 representing no impact and 5 signaling a significant impact, the availability of online rent payment services scored a 4.44. The one caveat was that renters wanted this transaction to go through without a convenience fee.
Given this ongoing trend, increasing numbers of landlords and property management companies are adding online rent payment services to their business procedures. One easy method is simply to implement an automatic withdrawal method. From the point of view of the landlords this system offers a number of benefits over the traditional method of collecting rent via a check sent in the mail.
First, under normal circumstances, when no payment problems are occurring, the automatic withdrawal method of online rent payment services requires no effort on the part of the landlord to collect rent. In addition, the system is easy to set up with the majority of banks and other financial institutions.
At the same time, using automatic withdrawal for online rent payment services is not perfect. Monthly fees can eat into profit margins or turn prospective renters away. It also requires monitoring to ensure that the rent was actually transferred to the account.
Credit cards also provide a method of instituting online rent payment services. To take advantage of this option, landlords usually need to have a merchant account that accepts major credit cards. This is usually easy to set up, but some landlords may not want to set up a merchant account. In lieu of a merchant account, PayPal can be used to create a system of online rent payment services. In some cases, landlords can build the online rent payment services into their main website, which is also provides terrific convenience for everyone involved.
Accepting credit cards as part of a property’s online rent payment services does carry some risk. Allowing a tenant to pay by credit card by unwittingly result in the tenant over-extending themselves to the point where they no longer have the means to pay rent. At that point, the situation can deteriorate into an eviction battle. Transactions fees also represent a necessary part of this type of service, something both tenants and landlords will have to come to terms with sooner rather than later.
These concerns are minor, however, when compared to the overall convenience and efficiency of online rent payment services. The technology surrounding them will steadily improve in the years to come, to the point where sending a check to pay for rent will most likely go the way of the eight-track tape and rotary phone.