Incentivizing On-Time Payments
Occupancy rates are ideal and residents are content, but there is still one problem – a number of residents perpetually fall behind on their rent payments each month. An October Census Household Pulse survey found that nearly 4.9 million households are behind on rent.
This is an issue that has burdened the industry since its inception, leading to a unified goal of the multifamily sector – improve the rent collection process to reduce delinquencies and increase revenue.
A Paradigm Shift
People still struggle to pay rent. More than 12 million residents are substantially cost burdened , spending over 50% of their income on housing and utilities.
Traditionally, enforcing the collection of rent from delinquent residents has consisted of repeated reminders, late fees and in extreme cases, the threat of eviction.
However, those strategies tend to result in strained resident-associate relationships and, in many instances, failure to produce the desired outcome.
Taking a new approach, most notably offering resident rewards with cash-back incentives, could be the motivating factor to improving payment practices.
A Proven Solution
Reward programs have yielded positive results for a multitude of industries. From shoe stores to coffee shops, consumers are looking for reasons to remain loyal to a business, and the most successful companies have found that offering a rewards-based loyalty program solidifies those relationships.
A Survey commissioned by Wildfire found that due to rising prices, 90% of consumers are more interested in receiving discounts and earning cash-back rewards when shopping. Additionally, when you consider that 84% of consumers are more likely to stick with a brand that offers a loyalty program, and 60% of customers enrolled in a rewards program say they have better experiences with those businesses, the concept of rewards in multifamily becomes increasingly appealing. By harnessing the power of rewards, including cash back, operators are incentivizing positive renter behaviors–such as paying rent on time–and creating an enhanced living experience for residents.
More than a Passing Trend
Tech-savvy residents have made it clear they want to do business digitally in all facets of their lives, and that includes paying rent. Forward-thinking operators have already started to implement smart home technology, more robust WiFi solutions and more resident communication channels. By aligning operations with the expectations of modern residents’ through digital means supported by positive reinforcement, such as offering cash back rewards, operators are laying the foundation for an enhanced living experience that produces higher ROI.
The multifamily industry has undergone numerous transformations over the years, but none have been as significant as the shift towards digital transactions. Embracing digital payment platforms and resident reward programs are viable ways to effectively incentivize on-time payments and increase revenue.
As technology evolves, so will the various strategies operators employ to mitigate late or absent payments at their communities. However, one thing is for certain – just as we’ve seen in nearly every other industry, loyalty programs are proving to be fruitful and are undoubtedly here to stay.
Source: Multifamily Insiders
Accessibility