Tenant Portals Gaining Popularity in the U.S.
In an age when almost everything can be paid for online, the majority of renters still find themselves writing old-fashioned cheques every month to their property manager or landlord.
While some large buildings give tenants the option of bank transfer or automatic withdrawal from their accounts every month, in some cases even that requires the renter first provide a void cheque.
While online tenant portals have taken off in the U.S., the idea has not caught on here in Canada yet, says Mike Chopowick, manager of policy with the Federation of Rental-Housing Providers of Ontario.
“I’m not aware of any specific property management companies in Ontario that have this capability,” says Chopowick.
The stumbling block might be the fact that the majority of small property managers and landlords aren’t comfortable with the technology available to accept online payment – technology that will also allow tenants to do other things online such as apply for an apartment, file a maintenance request, book elevators when moving out or arrange to use a building’s party room or other facilities that typically require physically tracking down the property manager.
In many cases, web portals can be tied to back end financial systems as well, which might sound like good business sense, but can appear complicated to a business that is typically focused on bricks and mortar.
Online payment for renters is “in its infancy in Canada,” according to Peter Altobelli of Mississauga, Ont.-based Yardi Systems, which provides asset and property management software including the Yardi Portal, which rolled out last year offering online services such as payment and applications for units. A managed condo building in Vancouver is using the product and he says there has been a lot of interest from rental buildings, but many are still investigating what it can do for them.
The portal product allows for online payment, service requests and lease renewals as well as online applications, unit availability and virtual property tours. The web-based portal can also allow for things like virtual yard sales in which tenants in a building can post things they have for sale.
“It can be a tough sell to building owners who are not tech savvy,” he says. “Our clients tend to be the larger property management firms and they are more innovative and have to show more value and are motivated to adopt new things to retain tenants and streamline costs.”
Smaller, family-owned property firms are less likely to want to investigate web tools, especially if their tenant base isn’t huge. But as the next generation of property manager comes along, Altobelli says their familiarity and comfort with technology will push adoption of online tools.
“The mindset is changing to more two-way communication,” he says.
An example of the younger generation embracing such a concept can be seen in PayYourRent.com, a Los Angeles, Calif.-based firm that provides a portal to incorporate online rent payment, utilities management, lease applications, maintenance requests and other features. The site has been live for 18 months and its creator, Kevin Eberly, launched the site to improve on tasks he felt were outdated. Coming from generations of real estate developers, Eberly decided it was time to make things more streamlined for tenants and for property managers.
“I think everybody is behind the times when it comes to online payment for the rental industry,” says Eberly, whose company manages 4,000 rental units in the Los Angeles area. “One thing we really wanted to provide was one-stop shopping for things like maintenance forms and applications as well as payment – from start to finish it would address the lifespan of a tenant.”
Eberly says 80 per cent of the property managers he has coming on board are small-to-medium-sized companies and they are looking to plug their existing website into a portal that will handle the transaction elements they want to provide.
The system is integrated with a credit check company and can process applications online complete with a Resident Report Card based on questions posed to applicants via the system.
PayYourRent.com, which has plans to enter the Canadian market in 2010, allows renters to use an electronic cheque or credit card for payment. Competing sites charge fees of up to $20 compared to the $4 offered by PayYourRent. There is no fee for tasks such as maintenance requests. Those with high-volume rental payments are charged lower fees.
The money is not collected by PayYourRent, but rather goes directly into the account set up by the landlord. Personal information given to the system is encrypted and audited weekly for security purposes and is Payment Card Industry compliant.
In the U.S., Altobelli says some online systems are even moving to self-approval where the system will also conduct a credit check and provide a lease online following approval.
And while some websites, such as PayYourRent provide tenants the ability to pay online with their credit card, Altobelli doesn’t see that gaining interest here in Canada as the credit card companies would charge a transaction fee of about 1.7 per cent to the landlord who would probably apply it back to the tenant and that might be viewed as a rent increase.
But Eberly says smart property managers will see that streamlining rent collection and providing an added service to renters will provide payback in the long run.