Gaining Efficiency in Real Estate Property Management by Offering Generation-Appropriate Payment Channels
National Real Estate Investor (08/24/13) Pierce, Nancy
In an increasingly competitive rental housing market, using resident demographics and preferences to strategically choose payment channel offerings enables apartment managers to enhance their resident experience, improve accounts receivable management, and save money. In order to be successful in any service industry, firms must be efficient and tightly manage their costs. A major challenge for apartment managers has been a shifting of generational demographics among their residents. Meeting the needs of existing and prospective residents often differs based on age. A 2012 J Turner Research survey explored online apartment search patterns, behaviors, and preferences across apartment communities owned by 10 different firms.
The study found that seniors are more wedded to paper checks than any other generation. The younger that residents are, the more comfortable they tend to be with electronic payment solutions. While some Baby Boomers still cling to paper, more of them are moving to electronic bill payment. As for the Millennial Generation, it’s no exaggeration to point out that some in this youngest adult demographic have never even written a check. Consequently, managers targeting this very big segment of potential residents should consider offering payment alternatives that take into account Millennials’ desire for flexibility, convenience, and their utter fearlessness when it comes to using online payment channels. The most recent Federal Reserve Payments Study revealed that the number of checks written each year was decreasing at a rate of nearly 6 percent a year. Meanwhile, electronic payments volume was rising at more than 9 percent a year. Accepting electronic payments can help managers boost their working capital by converting rent payments into available cash faster. In addition, it can help apartment managers reduce bank costs, as financial institutions are pricing their services to incentivize greater use of more efficient electronic payments. Finally, electronic payments provide an important tool for reducing payment fraud.