Whether you’re an active property manager, or you pay someone to handle management tasks for your rental properties, you’re investing time and money in juggling a myriad of tenant, property management and maintenance tasks. Just one of these is the collection of, and accounting for, rent payments.
o Issue of rent billing and/or reminders for prompt payment
o Delinquent payment reminders and action items
o Receipt of paper checks and accounting for proper tenant credit
o Preparation of deposit records and bank trips to make deposits
In an article titled Businesses Adopt Online Payments To Improve Cash Flow And Save Time And Money, WorkZ, a site for small business help, cites a Gartner research study on the costs of processing manual payments. The study indicated a cost of $2 to $5 to send a paper bill, and $10 to process a paper check. These numbers are related to a successful billing and on-time payment. As property owners and managers, we regularly experience late rental payments, with the associated costs of reminders and action to bring the tenant into compliance.
An actual property management example was outlined in the WorkZ article, beginning with this statement from the company involved: “Andrew Bloch, CFO and Alan Cusson, IT Manager of The Hamilton Company, Boston, Massachusetts, a large property management company, stated “that we have been looking for a solution where we could send a statement to our many tenants either by email or fax and to allow our tenant to be able to make payment over the Internet. Our company processes a significant number of transactions each month and it is very costly to send out statements. The problem with paper checks is that it takes a lot of time and money to handle them,”
Of course, there is the ability to accept credit cards. payment reminder However, the costs involved will make a significant dent in profitability. With the various fees involved in accepting cards, costs can be 2% to 4% of rentals. These fees are saved by the direct debit of the tenant’s bank account, and immediate deposit into the property management account. The electronic rent collection services offered by Buildium make this happen, and at a very low per-transaction cost. There are no credit card processing fees, and the cost to process a paper check is slashed by more than 80%.
By using an online rental payment system, the tenant gets some advantages as well:
o Ability to track their rental account history online
o They can pay from anywhere, even on vacation or away for business
o They save postage and a trip to the post office or mailbox
o It’s convenience in a very busy world
We owners and property managers save time and money by avoiding those trips to the bank to make deposits. Our cash flow improves, as the funds are deposited into our account immediately.
The Buildium online payments system takes care of the accounting function as well, automatically crediting the appropriate rental account, as well as monitoring delinquency status and sending reminders.
Whether you own or manage five units or 5000, this is a proven way to improve cash flow, cut administrative costs, and reduce staff workload.