Great Ways for Property Managers to Collect Rent Payments Online

Property  management can be tough at the best of times! Juggling tenant management,  collection of rent payments, maintenance and repairs, legal and compliance,  property inspections and vendor management make this a career for serious  multitaskers only.

If you're a  battle-weary Property Manager, this article is for you. We can't provide  solutions to all your responsibilities, but we can lighten the load a little  and make the task of collecting rent from tenants easier for  you.

In this article we'll discuss  the various complexities in rent collection, assess the pros and cons of  several payment methods, introduce the latest proptech innovations and give  you our three recommendations for how to collect  rent.

The Needs of Property  Managers VS Tenants

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Historically, Property Managers have faced challenges in offering payment methods that balance  everyone's needs.

Property  Managers need a method that can be easily offered to tenants, reduces admin  time and increases the likelihood of getting paid on time. Tackling these  issues reduces the need to chase outstanding payments and leave landlords  waiting.

While some payment  methods are more convenient for Property Managers than others, it is  necessary to offer multiple options. Most Australian states and territories  have legislation stating that landlords and landlord's agents must enable  tenants to pay rent from at least one channel where the tenant does not incur  additional cost (other than bank fees or account fees).

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Legalities  aside, tenants demand flexibility and are happier when presented with payment  choices. According to The Motley Fool (2022), "Renters were willing to  pay more than landlords thought they would for... convenient payment  options.".

Apart from rent  payments, Property Managers also require suitable payment methods to take  other payments from tenants such as the deposit, bond, water bill and for  repair costs where the tenant was at  fault.

It's also important to  consider the tenants' needs. Helping them meet their needs will help them to  meet your needs. Here's a snapshot of the various needs your tenants may  have:

•   Those who are less tech/digital savvy may require a method that  is familiar and doesn't feel complicated.

•     Those who are exceptionally busy may be convenience driven and  want a method that prevents them from forgetting a payment.

•     Low income earners may be interested in partial payments or  fee-free payment methods.

New migrants can also face difficulties paying rent. Understanding the Australian banking systems can be complex. New migrants and international students may be paying from overseas accounts and trying to  find ways to do this with minimal delays and  costs.

Chinese nationals might  also be mindful of the $50,000 USD annual limit for bringing funds outside of  mainland China and investigating legal and efficient ways to bypass this.

Offering simple and well  explained payment methods will reduce instances of late payment and reduce  time spent providing assisting or chasing up  tenants.

Common Ways to Collect  Rent

As discussed, offering  multiple payment options for your tenants is important. Here's a rundown of  common ways to collect rent payments along with their pros and  cons:

Bank  Transfer

Let's start by getting  the simple option out of the way - provide tenants with the property agency's bank account details for a bank transfer. Some tenants may ask for this as  it's a familiar concept. For Property Managers this is a risk as your BSB and  account number could be used to make fraudulent  transactions.

Direct Debit

For tenants who are busy and forget, direct debit is a common option. Some tenants will appreciate the  convenience of this, while others will be reluctant to let anything bigger  than their Netflix or phone payments be deducted from their accounts automatically.

Property Managers who wish to provide direct debit as an option will need to set this up with a  direct debit provider. Fees vary but can include costs for the setup, monthly  fees and costs for each  transaction.

The application  process requires significant documentation including ABN, proof of business  registration, personal identification, bank account details, financial  statements, tax returns and business activity statements. New businesses may  find that they're unable to provide all of this  information.

In-Person  Payments

Some Property Managers  may still allow payments to be made at their office via cash or cheque. Many  will discourage this to avoid the security risks and administrative time associated with cash. Cheques are also being phased out in Australia, with  acceptance of personal, commercial and government cheques being phased out by the end of 2028 and acceptance of bank cheques being phased out by the end of 2030.

Rent Payment Platforms

In recent years, several players in the Proptech industry have developed apps  which aim to make it easier for Property Managers to collect rent. Some of these focus mainly on rent payments while others strive to be an ˜all in  one', enabling Property Managers to perform several regular tasks in one  place.

From a Property Manager's  perspective, these platforms are the best option as they lack the pitfalls of  legacy payment options. However, to motivate tenants to use these platforms  it's important to recommend an option that works well for them  too.

There are differences in the  fee structure of each platform, which is something to consider however many  are great at negating some renter concerns, offering discounts off utility  bills and other perks.

3 of the  Best Ways to Collect Rent Online

Below  we have listed three excellent ways to collect rent payments. These encompass three different needs:

•     Platform solely focused on collecting rent payments.

•     ˜All in one' platform, collecting rent payments while offering  functionality for other property management tasks.

•     Custom solution for specific needs.

RentPay

RentPay is an award-winning  rental payment platform that does a servicing both the tenant and Property Manager. Tenants are given several options that make rent payments much easier. They've gone all in on creating an innovative ecosystem that's warm, friendly and helpful.

Tenants can put aside money early while it's available or set up direct payments on their  payday or at other convenient intervals they set. RentPay will then pay the  Property Manager when the rent is due.

There are incentives that reward RentPay tenant users, such as utility bill smoothing, collecting  credit card points and building a good credit  score.

For last minute payments, NPP/Osko is available. RentPay can also offer a one week line of credit for unexpected emergencies.

Chinese  migrants and international students can use popular Chinese electronic wallets Alipay, WeChat Pay and Union Pay using the platform too. These  options provide familiarity, and none of the associated costs, delays or  compliance limitations associated with alternative international payment  options.

We compared RentPay's  fees with other rent collection apps and found that tenants can really  benefit from RentPay's lower credit/debit card and BPay fees. Their customers  also get the chance to negate some of these costs through free, exclusive  access to a shopping rewards program.

This rental payment platform sounds great for tenants but what about Property Managers? Apart from making it easier for tenants to pay on time, it doesn't require set up costs for  Property Managers. Unlike typical direct debit arrangements RentPay is a dual-sided marketplace that provides benefits to both the tenants and the agency. Property Managers can easily create an account and take  advantage of features such as receipting and payment reconciliation, and rely  on system-generated automated alerts to keep their tenants on  track.<p>It's a win-win solution for  everyone!

Tenancy  Application

Another great way to  collect rent payments online is through the Tenancy  Application platform. This is an ˜all in one' platform for Property  Managers, delivering value and efficiencies by managing several key  milestones for the onboarding and managing of tenants.

These milestones include  the management of tenant applications, tenant checks, utility connection,  payment of deposit, bond and ongoing rent  payments.

If you're keen to manage  rental payments alongside your other key responsibilities all in one  platform, Tenancy Application will make your life easier.

Online Payment  Gateway

Some Property Managers may have unique clientele and require a payment solution that suits their  specific needs. One example of this is student accommodation, where a high volume of payments are made from families in China to Australian  universities.

Chinese families  face additional hurdles in making these payments such  as:

•     Language barriers.

•     Unfamiliar banking systems.

•     $50,000 USD annual limit for sending funds outside of Mainland  China.

•     High fees and long processing times for methods able to overcome  some of these hurdles.

Given the size of the industry, and the value it represents,  there are significant wins to be had by those who implement payment solutions  that overcome these  barriers.

Novatti works with  leading student accommodation provider UniLodge to provide an online payment gateway that does just that.

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The Novatti  platform enables Chinese payers to pay via familiar Chinese wallets AliPay, WeChat Pay and Union Pay. Payers use the platform on the UniLodge  website to pay from their Chinese Wallet. The payment does not contribute  towards the $50,000 USD annual limit and is conducted with ease. For  UniLodge, this option reduces the time they spend following up on late  payments or providing instructions. A great solution for  everyone!

Novatti's Role in Rent  Collection Solutions

At Novatti, we work with proptech innovators, student accommodation providers and Property Managers to provide solutions that overcome their unique payment challenges. We understand the evolving needs of Property Managers and tenants  and work with clients to develop unique solutions that not only overcome  these challenges, they become a unique selling point.

If you would like to ask a  question or arrange a friendly chat, please complete the form  below.

Interested in  reading about the future of proptech? Download  our proptech industry report here.

Sources

The  Motley Fool. (2022). Study: Do Landlords Actually Know What Renters Want? Retrieved from https://www.fool.com/research/study-landlords-renters/‍