Multi-Housing News - June 2009 - (Page 18)

tech trends Money Matters New trends in resident payment systems offer ‘multimedia’ flexibility By Christopher Hosford, Contributing Editor Effective resident payment technologies do more than just get money in the door. Providing residents with efficient, flexible ways to pay their rent can be an excellent customer-service, as well as a residentretention and new-customer acquisition, tool. Today, there are some intriguing new innovations in rent-payment technology that can make the process even more useful to both communities and their residents. “Having a multimedia approach to payment is critical to the success of rent-payment programs,” says Mike Radice, president and CEO of NWP Services, a leader in utility cost recovery and a player in the rent-billing arena. “It derives from resident proclivities month-to-month, their convenience, and their circumstances.” To Radice, “multimedia” means offering a full gamut of payment options, whether it’s checks that are then scanned for digital processing, automatic clearing house (ACH) online technology, automatic debit, cash payment at a money center (AKA “agent pay”), or payment by credit card. “Recent surveys have shown that paying rent or utilities online via ACH is enormously convenient to residents and one of the top five resident requirements,” Radice says. A full menu of options Offering the full array of payment options could be daunting for many multifamily communities, but it’s eminently practical. After all, residents pay their rent in a multitude of different ways depending on their circumstances, age, income and other factors. And individual residents may want (or even need) to shift among these various ways of paying on a month-to-month basis. Overwhelmingly, however, digital payment options rule the roost. “The goal is to keep a large portion of the property management staff on site as sales agents, helping keep the property full and residents happy, rather than in the office processing payments,” says Jason Gardner, VP-business development with PropertyBridge, a real estate payment processing provider. PropertyBridge, owned by MoneyGram, offers a unique approach to handling agent pay. “MoneyGram has a great relationship with WalMart, CVS pharmacies and other retail locations near many properties, and residents can go there to pay their rent,” Gardner notes. PropertyBridge aims this service at lower-end communities, where residents tend to use money orders for rent payment. Big property management solutions provider Yardi Systems offers its own resident payment modules, including the company’s Yardi Portal, which (among other capabilities) allows residents to make online payments using ACH or their credit cards. “Another new solution is our electronic rent-processing system, called Yardi CHECKscan, which turns paper checks into electronic transactions,” notes Brad Setser, VP-marketing with Yardi. “CHECKscan significantly cuts the time, labor and errors associated with manual check processing, and saves property managers from going to the bank.” To be sure, there are caveats associated with some of the emerging rent-payment methods. For example, for payments by credit card, there’s the interchange fee, averaging about 1.75 percent, that’s levied by the credit card company on the property. “But today more than ever, having money in the bank is a valuable thing,” says Stuart Litwin, CEO of SureDeposit, a company that issues surety bonds in lieu of security deposits. “If you have a credit card payment scheduled for the fifth of every month, there is value in that.” And while auto debit may be convenient, in particular within student-intensive housing where “mom and dad” pay the rent, there may be some unease in opening up one’s checking accounts in this way. While payment options vary in usefulness and circumstance, there is value in offering a choice. “The message is, a flexible and responsive payment system needs to be offered for any resident in any month, and that is transparent to the propertymanagement system,” Radice says. “When you add e-billing and convergent billing to the payment cycle, owners will get higher cash yields and get the good money faster.” MHN To comment, e-mail diana.mosher@nielsen.com. Payment trends to watch: ¬ The use of money or ders among the “unbanked” is declining, but given the economic downtur n, it’s anticipated that agent pay-type transactions via money centers like Western Union (not to mention other unique locales) will increase. ¬ Electronic billing, where residents receive their rent notices online instead of via the Postal Service, is becoming mor e common. It’s a practice that’s not only gr een, but one which consumers are increasingly using. ¬ There’s also a trend toward convergent billing and payment, where both rent and utilities ar e combined into one invoice. This may tend to speed up payments by eliminating one bill, as well as help to eliminate “forgotten” small balances that may slip through the cracks. ¬ Credit cards used for paying rent require plenty of resident discipline, but it may be gr owing within class A communities as residents seek the rewards associated with car d use, such as cash back or free travel. MHN ONLINE Sign up for MHN’s Property Management newsletter at www.multi-housingnews.com/newsletters 18 June 2009 | Multi-Housing News | Of ficial Publication of Multi-Housing W orld http://www.multi-housingnews.com/newsletters

Table of Contents for the Digital Edition of Multi-Housing News - June 2009

Multi-Housing News - June 2009
Contents
From the Editor
Executive Insight: Acquisition Strategy
Investment: Construction Conundrum
Property Management: Tech Tools
Strategy: Property Management
Case Study: TOD
Technology: Resident Payments
Turning Over Apartments

Multi-Housing News - June 2009