Do tenants prefer to pay online? Can a property management company do this?

I'm three weeks in to being a property manager. One of the things that shocks me is that the company I'm working for doesn't take online payments. I've always paid my rent online so this is odd to me.

I was told that with the amount of properties that this company collects rent for that it would be illegal to take online transactions since they have multiple bank accounts that they deal with. I find this hard to believe.

Is it possible for a property management company who manages for many different owners and works with many different banks have online payments for their tenants? If so, what system/source do you recommend and why?

Also, if this possible, do tenants use it or do majority still write a check?

Allot of it is going to depend on what type of properties they have. I was told that affordable communities could not do the online payments. So if your management company has both affordable and conventinal then they most likely wont do that because of fair housing issues. I could be wrong but that is how it was explain to me. I know Equity properties have everything online and outsource there rent collections but they dont have affordable housing communities. I think alss ultimately it comes down to the management company.

I know I should know this, but what is "affordable community" and "conventional"?

Affordable Housing Is Tax Credit, Low Income Housing, Public Housing

Conventinal is all the ones that are not and there are levels Class A Class B Class C

In general accepting rent payments on-line is a management company decision. And, at least here in California, is not yet regulated by any laws or government regulations (any more than any other sort of rental payment.)

This may be different in other states, but I have not heard that. On-line payments are growing in popularity both because management companies find them effective for collecting rents and because residents like the choice.

My company accepts on-line payments, but has limited these to "ach" transactions (ie: from a checking or savings account). We have chosen not to accept credit cards for now due to their high cost which we would either have to pass on to the resident or take as a loss (expense) on our books.

www.propertysolutions.com/

This company, which does "Resident Pay" can support the multi-property, bank, owner, etc management model.

When I managed property that had a lot of students, about 10% paid online & made it easy for parents to make payments on their kid's behalf. Also was great for out of towners to pay security deposits.

I went to a 55+ property & the resident generally have just not embraced the online payments. We set up ACH debits to coincide w/ social security payment on the 3rd of the month and about 35% participate. The rest pay by check & some by money order. Our company does not accept cash at all.

Usually the choice to accept online payments is set up by the Property Management Company. From my experience, the amount of tenants who prefer to pay online can vary greatly by the property and how the management company set up their electronic payment system.

I work for RentPayment ( www.rentpayment.com - we process online payments for renters) and with our company, the amount of usage by residents can vary greatly (anywhere from 2%-60%). It usually depends on the cost to the resident to make a payment.
There is a fee that must be paid with all Credit Card and ACH (electronic check) transactions and usually this fee is passed on to the resident as a "convenience fee" which can either be a flat fee or a percentage of the rent. We also have a lot of clients who choose to pay this fee themselves and offer the service free to residents... these properties have alot more tenants paying online. I would say the convenience fee is one of the biggest factors in determining if tenants will pay online or not.

Besides that, a lot are willing to pay the extra convenience fee because they like to put rent on their credit card. This could be because they are low on cash or want to earn rewards points or airline miles. Some residents also just like the convenience of paying online or find the need to pay online if they are out of town or need to pay quickly to avoid a late fee.

Hope this helps!

We have conducted studies for AMEX and PropertyBridge on payment systems, and I'd be more than happy to share some of the "sharable" findings. The bottom line is that online and automated payment programs are seen as one of the two most desirable "amenities" a property can offer...much more important than traditional amenities and services. Our view is that the greatest amenities are those that offer something everyone needs and wants...time savings/convenience. Email me at [email protected] and we can plan time to talk.

Doug

Thank you everyone for your replies. I should have mentioned that our management company uses Tenant Pro 7. Ideally, I would like a program that will work with Tenant Pro 7.

Our properties are conventional. We currently manage for 60+ owners. We manage everything from single family homes, to duplexes, to college apartments & complexes in a region of 5 cities (Purdue University & the surrounding cities, Indiana). We have 60 different bank accounts and plan to grow. We want to accept online payment because many ask for it. Now, we just need to figure out where to get started and which company to choose...