“But I put it in the drop box!” “Yes you did but it was after the due date.” But, it was in there before you opened your office this morning”
The all to familiar ring around the first of the month. Time to pay the rent and the drop box is the perfect scape goat for would be late payers.
My question: Do we need a drop box? Should we take them away and force payment during business hours only?
I am an advocate for it. Not because I want to make it hard for people to pay their rent. Not because I have a mean spirit. It’s rather because I’ve had thousands of dollars stolen from drop boxes over the years. I’ve heard every single excuse in the book relating to missing checks and money orders. I’ve even had a few drop boxes come up missing.
With the advancement of technologies; I think it is time to join the ranks of drop box as not an option for paying rent.
What are your thoughts?
0 Responses
We’ve had to do this at a lot of properties because of theft. We rolled out our Portal in 2010 to balance out the loss of the drop box. I can tell you though that the excuses do not stop with removing the drop box – they just shift. Now it’s “I couldn’t log in.” or “I logged in but it wasn’t working.” or “It told me I didn’t owe anything.” These excuses can be shot down with quick views of the logs but regardless they still occur.
Overall though I’m for removing them if for no other reason then the prevention of theft. Paying online is much safer and can be done in your pajamas, underwear or … GASP … never mind.
Bill
Thank you for chiming in. I have a question for you; do you have cases where people can only pay by money order because they don’t have a bank account? And, if so do you just have them pay during business hours?
We do have people who can only pay by money order because they don’t have a bank account of have bounced a check. On the properties where a drop box is located they can leave it. I guess the answer to your question is no.
Hey Mike, Good Morning
We have increased our focus on heavy fees for late payments after the first, some of which has resulted in some negative posts and such on the rating sites for us. Rent is due on the first and late on the second. We do not have a grace period. Not sure who invented the idea of a grace period, but we aren’t practicing that anymore. We have experienced a trend toward timely payments as such.
That said, over 70% of our rent payments are on line, which is good, except there is a three day lag for all ACH payments to clear, which we do not experience with deposited checks. In the past, we may have gotten a check on the fifth, but we didn’t have available funds until the eighth, which strains cash flow.
There is a balance with late fees and customer satisfaction that can create a challenge.
I have mixed feelings…one place where I rented only allowed checks and unfortunately, their office hours tended to be the same or shorter than mine which made it really frustrating to pay rent. And, I am guessing if people are required to pay by money order, we would like them to have a job or two. You will probably run in to people trying to slip payment under the door. It just depends on the type of community and the office hours. I am totally for it if everyone can/has to pay online!
All good points MD; and, thank you for taking the time to share them. To steal from Gladwell; I think we will reach a tipping point in the coming three years where there will be no other option but to pay on line. I, for one, can’t wait for that day. We persist in the meantime.
Have an awesome week!
I look at i t as bill paying is the least fun part of life, so I feel having the rent payment part be easy and stress free is important. From residents not having a bank account and/or computer to working odd hours, having a variety of payment methods is important. If now they can only pay during office hours or be required to pay some sort of extra service fees to pay online, it makes that already unpleasant part of life more unpleasant. Maybe putting more emphasis on securing drop boxes would b a better option than removing them
J
Thank you for taking the time to chime in. I can see it from both sides but having been through the experience of losing thousands of dollars via stolen checks and money orders; I am moving strongly toward doing away with them.
I do think it is a transition that takes several years to accomplish and I have to believe over that time there will be cheaper and better electronic options.
Thanks again and on an aside, I look forward to having you contribute by way of some blog posts! :-).
M
I think there would be a little bit of backlash from taking it away, but people would adapt. If you are old school just mail it in, if you don’t want the fee pay it out of your own account. That being said I don’t think you are going to stop the excuses no matter what you do.
I love the word adapt. It’s one of my keywords for 2012. Thanks for sharing your thoughts MJ!
Hope your week rocks!
M
We use Property Solutions International as our online payment portals and hosting. I have heard of other companies requiring online online payments to relieve their office staff of the midnight dash at 5 pm to the office to pay. Online is the best we have seen thus far. Especially with the smart phone market and now the apps that you can download and pay with 1 click. So Yes lock the drop box
L
Thank you for taking the time to drop a comment! We use property solutions as well. Our biggest challenge is that we manage A – B and C+ properties and you can likely imagine that we have higher adoption on the A’s and B’s but not so much on the lower B’s and C+. And, that happens to be where we see the biggest loss via theft and the such.
Really appreciate you chiming in and would encourage to stick around this year. We have added a couple of new authors who really know how to get and keep the conversation going.
Have a smashing year.
M
As a manager with over 200 units in a, b, and c buildings I would say that a drop box is not necessary. We have a P.O. Box that 90% of our tenants mail their rent checks into. As far as I know every person in America has a postal worker and has experience using the post office so there is really no excuse to not be able to use it. We even go out of our way to provide our tenants with pre-printed mailing envelopes so that they cant come up with some excuse that they forgot our address, does it cost a little bit sure but it gives the tenants something to walk away from the lease signing with that is a little more than there last landlord gave them, advantage us.
We also allow tenants to drop off their rent payments AT OUR OFFICE through our mail slot. We all know that the worst payers are in the worst buildings and putting up a box that is clearly full of money in a neighborhood that people clearly do not have a lot of money is just asking for problems. Now we office in a nicer part of town, on a bus line with easy access to the major highways put it all together and there is not a soul that cant make it to us.
So to answer the question, although at some point in the future smart phone saturation and internet usage will permeate into every single persons life we are not there yet. To attempt to push technology and practices onto people that do not wish to use them limits your market of potential renters and leads to even more issues in an industry that is already filled with them!! There is nothing wrong with going 20th century on paying rent and at the same time supporting a national postal system that could use all of the help it can get.
We’re already being nickel and dimed by everything else in life. How we keep a roof over our heads shouldn’t be one of them. Invest in more intelligently engineered drop boxes to prevent theft. We need to bring back the concept of ‘cost of doing business” on the side of business owners.