When the recession hit multifamily full-bore in 2008, many in the industry rightfully argued that rent collection—the monthly reconciling of the checks, cash, money orders, and online payments to balance out the rent rolls—would become the name of the game. While making sure you’re getting paid is a good idea regardless of the relative ups and downs of the economy, rent payment facilitators and property management firms with a collections mandate say that—perhaps surprisingly—renters are making their monthlies with little exception.
“Our payment rates that we are seeing across the network are not spiking right now,” says William Chaney, senior vice president of product development for Carrollton, Tex.-based RealPage's Crossfire, Velocity Products, and Payments, the company's Web-based payment system that processes more than 411,000 rent payments per month. “Our renters seem to be paying their rent. Perhaps they are making hard choices in other expense categories, but rent seems to be one of the things that they will pay. We are not seeing much of an increase on delinquencies.”
At Atlanta-based REIT Post Properties, executive vice president and president of Post Apartment Management Tom Wilkes says net rent delinquencies is still under half a percentage point across the company’s 20,662-unit portfolio in seven states and the District of Columbia. “I would echo the comments coming from [RealPage] and others,” says Wilkes, who adds that Post maintains an internal collections unit to follow up on all delinquencies. “There has been an uptick in the number of skips, but it is still less than 1 percent of our move-outs. The most important metric to us is net uncollected rents, and we are still less than half a percent delinquent.”
Likewise, Portland, Ore.-based Guardian Real Estate Services’ regional portfolio manager Jahna Overcash says residents in her Washington State portfolio are all paying rent. “There are small delinquencies at individual properties of 1 percent to 2 percent, but portfolio-wide, the rent flow is still the same,” Overcash says. “We don’t have any issues.”
One key strategy Guardian has found to be effective in maintaining infinitesimal delinquencies has been multiple rent reminders: two written communications prior to a final paper billing notice. “It prompts the resident who might be having a problem to come in and talk to us and work something out,” Overcash says. “It’s been extremely successful at eliminating payment problems before they start.”
For a look at whether the "new economy renter" is doubling-up or not, click here.