As prices continue to soar and inflation hits record highs, a staggering 78% of Americans are living paycheck to paycheck. That strain is especially felt in the multifamily space. According to The Census Bureau, nearly half of renters (49.7%)–representing over 21 million households–are classified as cost-burdened, meaning they spend more than 30% of their income on rent.

For owners and operators, this poses a significant challenge. Financially stressed residents are more likely to have difficulties paying their rent on time or may be forced to move out, resulting in higher turnover rates and loss of revenue. Fortunately, innovative approaches can help mitigate these risks while providing a bit of support for residents. One initiative making a positive impact is the implementation of a rewards program powered by a digital payment platform.

Why Reward Programs Are Effective

Across nearly every industry, customers prefer companies that offer a rewards program, with 75% of consumers indicating they favor businesses that do so. In the multifamily space, reward programs allow residents to earn points that can be redeemed for cash back on rent, discounts at local shops, or other valuable benefits.

For residents managing tight budgets, even modest rewards can offer valuable support. In addition to providing incentives for performing routine behaviors like paying rent, rewards also can inspire positive resident behaviors, such as posting reviews, renewing leases, and paying rent early and digitally each month—actions that benefit both residents and property managers.

Rewards and Digital Payments - A Powerful Combination

Offering a rewards program within a digital payments platform incentivizes the use of digital payments, making rent payments easier and more efficient for everyone involved. This approach allows operators to cultivate a community where residents feel appreciated and supported. Driven by the prospect of earning rewards, residents are more likely to embrace the platform and may even pre-schedule payments, helping ensure their largest monthly expense is paid on time and with ease. This blend of convenience contributes to greater resident satisfaction, ultimately supporting retention and engagement.

For property managers, the advantages are clear: fewer late payments, a more reliable revenue stream, and the security of chargeback protection against disputes or bad payments. In addition to streamlined payments, resident rewards encourage behavior that drives community success and resident happiness which leads to higher retention rates and improved all-around financial stability.

With 40% of multifamily organizations already leveraging a rewards program and 92% of owners and operators acknowledging the benefits, it's clear that rewards not only supports resident satisfaction but also gives management groups a competitive edge.