Rent collection trends among commercial real estate professionals

Rent collection trends among commercial real estate professionals

Rent collection software can help real estate property owner and operators increase efficiency and streamline operations. The commercial real estate industry, however, has been slow to adopt this solution. To find out why and learn more about rent management trends, we polled 130 experienced real estate professionals.

Key takeaways

  • Owners/operators need a compelling reason to adopt rent collection software. Most real estate professionals handle monthly rent collection and recording themselves using manual procedures. Many respondents don’t see a need for rent collection software, and cost is a barrier for others. And among the owners/operators who use rent collection software, there isn’t a dominant solution.
  • Key selling points include reducing staff time and cost, offering more payment alternatives and decreasing payment times. The most important existing software features among respondents are tenant autopay and fund accessibility within 24 hours. Their top-rated add-on features include giving tenants more options for paying their rent (at a bank ATM and through their banking app) and QuickBooks integration.

Commercial real estate managers remain hands-on

Most commercial real estate property managers (64%) handle monthly rent collection themselves; 88% of these managers use manual procedures.

Monthly rent collection methods:  •  Paper check/cash/money order: 68%  •  Rent collection software: 10% • Other digital: 22%

Attitudes on Technology: Technology’s convenience, speed, and ease of use are top priorities for roughly half of respondents. 51% When on the go, they use a mobile device to perform their office tasks • 51% Software must provide immediate access to real-time information • 43% Their business is going to be more and more dependent on technology over time

Most owner/operators don't use software solutions: A lack of software knowledge is partly to blame for limited adoption, but the primary reason is smaller business owners simply don’t feel the benefits are needed. • 40% This type of software does not make sense for the size of the business • 65% The business is able to run smoothly without this type of software • 36% They are not familiar with this software • 14% The cost of this type of software is prohibitive55% Affordability of the software • 51% Reduced time and cost to collect and record rents • 63% Ability to offer payment alternatives to their tenants • 24% Reduced time to receive funds
Software solutions help owner/operators save time and money. What drives their continued use of the software? • 65% They are better able to manage the rent collection process • 55% They are saving money over manual procedures • 51% They see an increased number of on-time payments

Top-rated add-on features include giving tenants more options for paying their rent, such as at a bank ATM and through their banking app, and integration with QuickBooks or other accounting software.

Software solutions can add to costs. Most property management or rent collection software users pay a regular fee, which can add up to several hundred dollars each month. •  12% pay a fee for each transaction •  16% pay a one-time fee •  22% use a free solution •  49% pay a monthly pre-determined fee (Among users who pay monthly fees, average fees are $356; half pay $200 or less.)
Most respondents hold five-figure general account balances. More than half of respondents—many of whom use personal accounts for their business—hold an average monthly balance of less than $100K. •  53% of all day-to-day property operating accounts (i.e. accounts through which property income and expenses flow) hold $100K or less; the average account balance is $313K. •  59% of other accounts dedicated to property business (i.e. reserves, deposit accounts, etc.) hold $100K or less; the average account balance is $285K.

Who we polled: Almost all respondents are maintaining or moderately growing their business. On average, they own a total of 89 units. The poll was conducted in 2020.

By the editorial team at Story by J.P. Morgan

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