Reducing Fraud and Paperwork with Payment Platforms
There are unique challenges in the low-income housing market that cause administrative stress on top of the already complicated housing rules and regulations, one of the biggest being how to handle rent and HOA payments.
Your standard and old practices are that of receiving rent in person during regular business hours, money orders sent or delivered to the office, and your regular checks sent via post. Thankfully, most are moving away from drop boxes due to the high risk of fraud and theft that they invite. Not only are these options limiting and somewhat challenging for both the property managers and tenants, but they also require unnecessary time and money to be spent. For example, if part of the rent goes to a HUD repayment agreement, staff will need to split payments manually, send out said payments, record in the books for accounting purposes…you can see how these things begin to add up. The process as a whole creates administrative headaches for resident and property.
Cue integrated payment platforms.
These platforms allow property management companies to accept multiple forms of online payments which in turn cut costs, save everyone time and most importantly make the process much more convenient for tenants and managers alike.
Since the goal is to create and consistently improve the renter experience, this tool is integral. Using online options to handle business electronically frees up time for managers to stay connected to their residents and their needs. A bonus is that the critical interaction between the two parties will no longer focus on exchanging money, creating an opportunity for authentic communication.
Paper money orders may seem like a perfect and straightforward solution, one that many are now using. However, it brings an increased opportunity for theft and fraud. On top of that already troubling issue, it can also create additional expenses for both property managers and residents.
By accepting online forms of payments, you free up onsite staff from having to handle these transactions. It also reduces the probability of the ever rising problem of money order fraud. Having money orders in the office is basically the same as having cash lying around. Money order fraud is quite prevalent, being as easy as replacing the name on one. Although one hopes to have vetted well enough to prevent dishonest renters, it is easier than ever to produce fake personal checks and money orders these days. The FTC has warned that these types of counterfeit scams are on the rise.
Platforms such as AppFolio allow property managers to collect rent electronically in a very safe and accessible way. Not only can the renter pay online without the worry of fraud, but they can also easily connect their preferred debit or credit card, bank account, or credit union so that rent will be collected automatically on a specified date. By doing so, your percentage of tenants that acquire late fees will drop drastically, making everyone happy.
JMK Property Investment utilizes AppFolio for this very reason and has had tremendous positive feedback on the topic. Homeowners and renters alike can access their accounts via the online portal, a one-stop shop containing their due dates, transaction history, lease information, and maintenance requests. In this day and age where technology and convenience are kings, this platform is the holy grail.
That’s something property managers may not have had the luxury of until now and to ignore the opportunity it provides would be a costly mistake.