Our parks were purchased as turnarounds and we didn’t feel comfortable forcing the tenants to conform to a new payment system on day one. Right or wrong, that’s what we did and it’s definitely been annoying getting the typical “I lost my money order” and “I promise I mailed it” responses from tenants. However, this has been pretty rare (maybe two a year).
Just like most operators, we have all kinds of tenants ranging from the 80-year old senior who doesn’t know what the “innerweb” is to the middle-aged blue collar couple that only uses money orders.
What we have done is slowly introduce technology to the tenants while still providing some flexibility in payments methods. We use Quickbooks for our accounting system and use their merchant services and Bank Transfer features for online payments. As part of our new lease agreements, we make automatic “bank transfers” a requirement. If they want to live in the community, they must be willing to have their rent payments be automatically drawn. We have never had a new tenant object to this.
About half of the original tenants have converted to online payments as well. Younger tenants almost expect this kind of service and many of the older tenants simply don’t want to deal with writing checks and mailing letters so they like it as well.
However, we still get checks in the mail and deposit them either via remote deposit or a monthly trip to the bank. Personally, I don’t mind it because I rather enjoy collecting checks as it is a reminder to me why I’m an investor in this industry in the first place.
The fact is, there are so many different technologies to use right now and tenants are becoming more and more comfortable with them. The only legitimate excuse for not being able to use technology for payments is if a tenant does not have a bank account and can only use money orders for payments. Personally, I don’t know anyone where this applies. If a tenant has a bank account, why would they NOT want to save themselves the cost of a money order and the inconvenience of a trip to walmart or the local bank? We’ve found that a simple explanation to them is typically enough to get them onboard with online payments.