Giving renters the ability to have flexible rent installments during the month improves on-time payment rates and reduces short-term late rent, according to a new study from economic research firm MetroSight.
“Rethinking Rent,” conducted by economists Daniel Shoag and Issi Romem and commissioned by Flexible Finance (Flex), examines the rent payment service offered by Flex.
According to the economists, the central finding is about timing. While most workers get paid every two weeks or twice a month, full rent is typically due on the first of the month. The findings highlight how this mismatch is an overlooked driver of late rent that is distinct from affordability, noting how a household can have money over the course of the month but still come up short on the day rent is due.
“Housing stability conversations tend to focus on the cost of rent, and that matters enormously,” said Ryan Metcalf, vice president of public affairs at Flex. “But timing is a separate, fixable problem. This research is the clearest evidence that aligning rent payment with when people actually get paid helps renters stay current, and that reliability is good for residents and property owners alike.”
The study analyzed nearly 500 rental properties comprising approximately 75,000 units in 25 states, with 134 offering Flex. Key findings from the properties where Flex is available include:
- The share of rents paid on time was approximately 3 percentage points higher than at comparable properties not offering Flex;
- The share of rents up to 30 days late was approximately 2.5 percentage points lower than at properties not offering Flex; and
- The properties offering Flex were found to have longer median resident tenure and lower vacancy.
“The most robust result is the one closest to how the product works,” added Romem. “When you let residents align rent with their pay cycle, rent shows up on time more often. The downstream effects on tenure, vacancy, and operating costs all point in a consistent direction.”