By Justin Yung
"If you want to win your residents' loyalty, save them time."
Property owners and managers who understand the benefits of high resident
satisfaction - a reduction in resident turnover and invaluable 'word-of-mouth'
promotion of their property - go to great lengths to provide excellent
service to residents.
However, in their efforts to provide residents with an ever-increasing
number of amenities and longer hours of service, many property owners
and managers overlook a simple, inexpensive, and mutually beneficial
amenity: the option for residents to pay their rent automatically.
Automatic payments require a one-time setup on the part of the resident.
The resident provides the property manager with information from a credit
card or a checking account. Once setup, the resident is relieved of the
chore of remembering to pay rent and the hassle of writing and delivering
While automatic payments have been used to achieve convenience for
consumers in many areas - from health club dues and insurance payments
to newspaper subscriptions - adoption in the rental housing market has
been limited. One key reason for the slow adoption is that rents are
high dollar amount transactions. If a property were to use credit cards
in automatic rent collection, a percentage (approximately 2%) of the
transaction amount would be charged to the property as a credit card
fee. For a $700 rent, this would result in a $14 processing fee - a
monthly charge that is financially unacceptable for many, if not most,
Fortunately, there is a better alternative. Property managers can set
up automatic payments through the Automated Clearing House (ACH) payment
network. The ACH network is the most widely used, bank-based electronic
funds transfer network in the United States. It is the payment network
that is used to transmit payroll for millions of employees through 'direct
deposit.' The ACH network is safe, reliable, and inexpensive. Rather
than charging a percentage of each transaction amount like credit cards,
the ACH network charges a small fixed fee for each payment made.
Using the ACH payment network, property managers can schedule a resident's
rent so that funds move automatically from a resident's checking account
to the property company's checking account. Federal Regulation E (the
Electronic Funds Transfer Act of 1978) safeguards consumers against
the inappropriate movement of funds from their account.
Traditionally, setting up a property to use the ACH payment network
meant purchasing ACH software for a PC and transferring files back and
forth to an ACH processor (a bank or a company specializing in ACH processing).
With the arrival of the Internet, there are Web-based solutions that
make ACH payments easier to schedule than ever before.
Article Provided By:
ClearNow, Inc. of Durham, North Carolina is a pioneer in easy-to-administer
Web-based ACH solutions for the multifamily housing market. For more
information, contact ClearNow, Inc. at 919-680-4500 or visit their Website
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