by Leslie Hyman
Modern consumer expectations have greatly evolved over the last decade – especially when it comes to shopping and buying. For instance, if consumers make a substantial online purchase, chances are they have the option to pay in increments rather than in-full, using platforms such as Affirm or Afterpay.
The freedom and flexibility to make purchases via multiple payments on a schedule that best fits an individual’s cash flow is now a benchmark of what consumers have come to expect.
To no surprise, that expectation has trickled into the multifamily industry, where residents make their largest monthly payment. A number of operators have already adopted new technologies and processes to meet renters’ evolving needs, which has expanded prospect pools, streamlined the leasing journey, and increased renewals.
Many operators are taking the same approach for rent collections. By offering more flexibility with payments and automated, customized payment schedules, operators are increasing rent collections, reducing delinquencies, and more effectively recouping late payments. Payment options are an obvious benefit to residents, but they’re also notably advantageous for operators when it comes to protecting and improving NOI and asset value – a genuine win/win scenario.
The on-demand, subscription, and buy-now-pay-later economies have embedded new expectations in consumers, such as the ability to split up payments and choose customized payment dates. This allows consumers to pay how they want, whether it’s in full or opting for monthly payments. They no longer need to do things on somebody else’s terms – they now have the power to choose when, where, and how they make a purchase. While these methods may not be ideal for consumers of every industry, a similar approach for rent yields positive results for both operators and residents.
Operators are innovating the rent payment experience to increase on-time rent collections each month. By offering comprehensive payment options, residents can better match their cash flow to their largest monthly expense, increasing their ability to pay on time. Based on our internal analysis of rent collection before and after a comprehensive payment platform, operators saw over a 17% increase in on-time payments when they offered residents flexibility.
By offering renters a choice in how they make their largest monthly payment and the ability to customize a payment schedule, operators proactively increase on-time payments while reducing delinquencies. Our rent collection analysis also found that operators experienced a 400% reduction in delinquencies when offering a comprehensive payment platform.
From choosing their own seat on a flight to opting for no ads on a streaming service, consumers crave customization and are even willing to pay for it. When an individual feels that the service or product they are being provided is catered specifically to them, they are more likely to continue using it. According to Epsilon research, 80% of consumers indicate they’re more likely to make a purchase with brands that offer personalized experiences.
There has been an enormous push in rental housing to customize even more experiences for renters. Automation makes customization not only possible, but nearly effortless for everyone involved as automation does the heavy lifting for onsite teams. Most of personalization happens within leasing and through resident communication, but there are still ample opportunities to offer a customized renting experience.
An internal survey found more than 70% of respondents reported having to pay their rent late at least one time in a 12-month period. That statistic alone illustrates why potential renters tend to gravitate towards communities that offer personalization – especially ones that offer ways to customize monthly payment dates in a way that supports their financial health.
Modern renters are craving a dignified way that allows them the flexibility to better manage their income and pay their biggest monthly payment on-time in a customized manner. Operators are searching for a more effective way to collect rent each month and support residents who are catching up on arrears. By providing comprehensive payment options, operators cater to residents, and improve their bottom line.