Apartment Investment and Management Co. (AIMCO) is getting double benefits from adopting electronic payment systems: residents get more options for payment of rent and other fees, and AIMCO’s leasing staff gets to focus on filling properties and providing services instead of pushing paper.
AIMCO, an apartment giant with about 1,370 apartment communities and a total of 240,000 units in 47 states, is also a real estate investment trust (REIT). Its size and status as a public company added some complication to its search for an e-payment system because it had to handle complicated fund transfers across state lines, and it had to meet the regulatory requirements of a REIT.
Major banks told the company to forget it – the intricacies involved were too difficult to overcome. But AIMCO continued looking for an automation solution. In mid-2005, AIMCO adopted e-payment technology from PropertyBridge, beginning with setting up a connection to an automated clearing house for processing payments. The link was built in two months, and the successful nationwide deployment took only 24 hours, according to Mike Fortinberry, AIMCO’s vice president of resident services. For the second phase, AIMCO tackled credit card payments, and on Oct. 1, AIMCO converted from on-site terminals for credit card transactions to Web-based systems. With those two phases under its belt, AIMCO began working on a system to integrate the e-payments system with its accounting and centralized payment processing, or “lockbox,” system. Currently under construction, that system is expected to be deployed in late summer or early fall.
Each step of its e-payment effort helps the company fulfill its goal of simplifying the payment system for residents and freeing up property staff during rent week. “Many of our customers lament the fact that rent week is the week in the month with the least amount of productivity,” said Ryan Gilbert, PropertyBridge’s CEO.
“Rent week is a burden on the properties,” Fortinberry agreed. He said sales performance decreases, training gets deferred, and there’s a decline in focusing on customer needs because the leasing agents are focused on receiving, recording and processing payments. By switching to a lockbox system, “we move a large number of our rent payments to a central facility, where they can be opened, processed, and deposited,” said Fortinberry.
AIMCO and PropertyBridge are integrating the payments software into the REIT’s backend accounting systems, so payments will be automatically posted into its accounting software.
“That removes a lot of the labor intensive efforts of rent week and makes us a lot more efficient 20% of the month,” he added. “If we simply closed business at the same rate we closed business the rest of the month, that’s a material improvement.”
Fortinberry said that such an improvement in process not only uses time more efficiently, it better matches the skills of the leasing agents.
“We don’t think administration work should be the focus of a community staff,” he said. “They spend far too much time doing administrative work — accounts payable, accounts receivable, etc. [Why can’t] we automate a lot of those processes? Most of the world did this in the 1970s. We want to focus on serving our customers.”
Don’t stand in the way
AIMCO does not view e-payment offerings as an opportunity to foist added processing expenses onto residents by charging them fees. Fortinberry said the company believes that “if we’re going to make credit card services available to residents, we should accept the costs on our side,” he said.
“We want to make it easy for our residents to pay,” he said. “You want them paying through the least expensive methods if possible. But we don’t want to forget that getting paid is the key.” So he offers options – direct debit, credit cards, electronic check scanning, etc. “We don’t care which. However you want to pay us, we want to make it easy.”
AIMCO’s future plans include online bill presentment and online account access, which would allow residents to go online, see the status of their accounts, and receive a bill via e-mail rather than have an invoice mailed to them.
AIMCO would also like to preassign user names and passwords, so that when new residents sign their leases, they will automatically be given their user login information.
PropertyBridge charges a couple of basis points per transaction, though the amount varies depending on the type of transaction, said Gilbert. There is also a set-up fee of about $3,000 per enterprise.