Auto-Pay Incentives

[BenjaminB]

Hello,

I'm trying to get some ideas on auto-pay incentives. Of course there are the typical selling points of convenience, avoid late fees, don't have to remember to mail or drop off payment, etc...

Have you had success with a particular auto-pay incentive for current tenants? Such as a one time discount on a future rent payment ($15 off, etc) or a local gift card?

How about for new tenants? One time discount or free lock perhaps? (I'm currently not requiring auto-pay but I'm considering it for new tenants)

Any ideas are greatly appreciated.

Thanks!

-Benjamin

[letsgosonics]

Here's my point of view on autopay (keep in mind were owner operated so every penny counts to me)

Autopays are great for convenience, but they do cost money for the facility. Cash & checks = no fees, so a few bucks for every $100 when doing autopays adds up very fast. Say you process $5,000 in autopays per month, that could equal upwards of $100-$200/mo in fees just for autopays, or $1,200-$2,400 per year. I'd much rather have that money to spend on myself (greedy I know). I know that not everyone paying with autopay would pay cash or check.

Another thing to look at (from an owners point of view) is that late fees = free money. The more I incentivize to reduce late fees, the more money I'm taking out of my own pocket (still being greedy I know).

Yes potential late fees could end up being auctioned, but typically those going to auction are doing to be late regardless of the type of payment you offer (autopay or not).

Is it nice for me to process autopays all at once, you bet, but that's really all for me. I can use it as a selling point if needed, but I usually don't offer it up front. More work for me for sure, but less fees and more potential late fees collected.

If I managed a facility (not owned), I'd be wanting 100% autopay, simply in terms of workload.

[BenjaminB]

Thanks for your insight. I'm owner operated as well so I definitely understand how every penny counts! I'm still weighing the pro & cons of forcing auto-pay.

I like your point about the ones that are going to auction are going to late regardless of payment type. Those are the ones that I'm mostly trying to prevent.

There are some that are late every single month... those are the best ones. They pay the rent and late fee every month. No complaints from them either. $30 rent and $15 fee... I don't understand their logic. 2 late fee equals a month of rent...

[bwmary]

The owner I work for also likes late fees. In the past my pay was based partly on delinquency %. I figured it was easier to get the rent money before the late fees were added. I worked it hard to drop the percentage as fast as I could. I always say I will start the hard collections after the first late fee, but haven't started that yet.

[letsgosonics]

Thanks for your insight. I'm owner operated as well so I definitely understand how every penny counts! I'm still weighing the pro & cons of forcing auto-pay.

I like your point about the ones that are going to auction are going to late regardless of payment type. Those are the ones that I'm mostly trying to prevent.

There are some that are late every single month... those are the best ones. They pay the rent and late fee every month. No complaints from them either. $30 rent and $15 fee... I don't understand their logic. 2 late fee equals a month of rent...

Exactly, we have probably between 5 & 10 that pay late every month, same thing. Our late fees are $25, so we count on that $250/month from those people. Typically our late fees generate us $600-$1000 per month at our facility, that's around $10k per year. Reason #1 why we don't push autopays lol.

[crsw2468]

We are a new facility. From the beginning we have offered a free lock upon signing up for auto-pay. Type of lock depends on size of unit. We are currently 85% auto-pay. Owner is a CPA and this is what he wanted. We use Quikstor and process through them. I believe they got a rate they are happy with.

[MusicCity Gal]

I agree that credit card fees quickly accumulate. And that is why I never offer an incentive or discount for auto pay.

I do like ACH Draft. The fee is substantially less per transaction and you do not have to worry about expiration dates or card being compromised (Think Target Black Friday fiasco).

I do love auto pay customers. Sometimes, I will waive a late fee if they sign up.

[pacnwstorage]

All new tenants HAVE to be on auto pay. If they don't want the card to be charged they have to pay early. Lots of existing tenants have gone to auto pay as well. About 5% of existing tenants still pay another way.

[anthonyvjadams]

We don’t tend to incentivise people to sign up to auto-pay. The convenience factor alone is worthwhile for most customers.

If we were to incentivise it we would perhaps give them a free lock or disincentivise other payment methods.

[BenjaminB]

Thanks everyone!

-Benjamin

[Iamkathleenj]

We offer auto pay to customers but have never pushed it. We make it super easy to pay ( cash, drop box for money order or check, online account payments, text & email links for payments ) so if they don't pay it is not like we didn't try to remind them. If they are late they get a late fee and that helps our revenue. Our occupancy is very good and our monthly revenue has been increasing steadily the past 5 years although this year I think we are going to top out. My job is to manage a successful business, increase occupancy and make money for the company and that is what we are doing.

[Dave Scott]

We offer auto pay, saves a phone call at the call center. There fore we have time for other things, like renting a unit.

[tkjoneslv]

Hello,

I'm trying to get some ideas on auto-pay incentives. Of course there are the typical selling points of convenience, avoid late fees, don't have to remember to mail or drop off payment, etc...

Have you had success with a particular auto-pay incentive for current tenants? Such as a one time discount on a future rent payment ($15 off, etc) or a local gift card?

How about for new tenants? One time discount or free lock perhaps? (I'm currently not requiring auto-pay but I'm considering it for new tenants)

Any ideas are greatly appreciated.

Thanks!

-Benjamin

We give 10% off each month with autopay.

[tkjoneslv]

Thewre is a new owner where I am. He wants everyone on autopay so he can get the lump deposit every month on the first, rather then trickling in. He also has no patience for the constantly late. I explained that for every customer that regularly pays late, that is an extra $120 a year in late fees.

[pacnwstorage]

Thewre is a new owner where I am. He wants everyone on autopay so he can get the lump deposit every month on the first, rather then trickling in. He also has no patience for the constantly late. I explained that for every customer that regularly pays late, that is an extra $120 a year in late fees.

If he likes the money coming in then he should not do a 10% discount each month for auto pay. If the facility speaks for itself and offers a good bang for the buck then it should just be mandatory like it is at my facility. Out of over 600 tenants here I had 7 late tenants on the 10th. I too used to stress over late fees, bugged me. But then I just stuck to my guns and never credited late fees back and the tenants got the message.