

Ask HN: Why don't we pay our rent online? - ramoq

After juggling through serveral statup ideas, one that often made me stop and think was the current state of rental payments(for apartments etc).<p>There are plenty of companies in this space(facilitating online rental payments), but not a single one of them has made a splash.<p>I've come across several 'hurdles' when looking at solutions for this. The biggest being high transactions costs on large payments being sent (via paypal or even merchant accounts with banks). When paying 800$ a month there is quite a bit to fork over in trans fees.<p>any ideas?
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tempuname
I am currently one of the people responsible for the finances of a student
housing cooperative.

There is precious little property management software and services directed at
small to medium sized landlords (most of the market). With a couple hundred
members/residents we're a fairly large organization, bigger than almost all of
the other landlords in our market, but we're still too small to afford what's
out there.1

Address the following problems and you will have a hundred billion dollar
market to yourself:

1) Margins are pitiful and you want to take 3%?

2)Retailers have to take credit cards because consumers can just go elsewhere.
Tenants don't really choose a place to live based on payment options.

3) Staff is untrained and cheap. Typing checks into Excel or Quickbooks is
dead simple. We calculated that for the cost of automating this process with a
Tenant Pro2 module and ach, we could hire another full time staff member.

4) We have no IT staff. Existing services all talk about integration with
accounting software and marketing web sites. The vast majority of landlords
use Quickbooks/Excel and have no web site. Don't integrate, we can
import/export monthly.

5) We don't have accountants on staff.3 Even those that can afford Tenant Pro,
don't really know how to use it. Less is more. Tenant, apartment number,
payments, payments owed. Anything more and you'll just confuse us.

6) Problems 3+4+5: Less than 25 units, the landlord is the accountant, general
counsel, marketer, agent, IT, general contractor, and often subcontractor.
Going to the bank once a month they can do, but you want them to wrap their
head around ach?

\-----------------------------------------

1.Take a look at propertysolutions.com. The clients they list have thousands
or tens of thousands of units. That, and the fact they don't post prices or
fees anywhere tells me there is no way they can help me.

2\. Tenant Pro, the dominant property management software, is crap. Please
kill it.

3\. Actually, we have one, but we're a feel good nonprofit so we pay peanuts
and our funky ownership structure makes it a requirement.

sorry this is a mess, been a long week

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cperciva
_Why don't we pay our rent online?_

Probably because the US banking system is about 30 years behind the rest of
the world. Outside of the USA, people pay their rent via bank transfer all the
time.

~~~
daleharvey
I was slightly confused by the question, Ive been paying rent online for 4/5
years now (UK)

and I honestly thought our banking system was pretty archaic

~~~
ramoq
Yes it would be prudent to mention this question pertains to us North
Americans :)

~~~
fburnaby
Just Americans. I'm in Canada paying my rent online.

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pg
We've tried three times to fund startups solving this problem. There's one in
this cycle that may be the answer.

~~~
ramoq
Exactly, I think there are over at least 10+ companies in this space. But for
some reason they all suck (and their domain names are far worse).

"We've tried three times to fund startups solving this problem" <\- They never
surfaced? Did they change gears along the way?

p.s. Debit payments online are usually not subject to high trans fees, but
that could change soon (I'm from Canada)

~~~
pg
One fell apart due to founder disputes, and another changed their idea to
something else.

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IsaacSchlueter
I've been thinking about this a lot ever since I moved out of my parent's
house as a kid. In fact, it's probably my most promising startup idea at the
moment, and I've done a little bit of research into it. (Of course, everything
changes once you start in earnest.)

The whole apartment renter experience is abysmal, and the existing solutions
on the internet provide little if any help in most metropolitan areas. Of
course, the experience for the owners is usually not a cakewalk either; they
face a very competitive market, often with thin margins, high risk, and
abusive tenants. One reason why they often don't accept CC payments for rent
is that they simply can't afford to!

It's a very regional kind of market, involving a lot of hand-holding and shit-
shoveling. Perfectly suited to a small rag-tag group of hackers, imo, but
definitely not a quick turnaround "next facebook" kind of startup. Google is
unlikely to buy you out ever.

A lot of money changes hands between renters and property owners. My gut says
you could make a good living if you could figure out how to tackle this
problem in a way that makes the experience suck less for everyone involved. At
lest, that's one sketch on my whiteboard. I'm looking forward to having some
competition. ^_^

In the short term, if you're like me and simply cannot accept the PITA of
remembering to walk downstairs with a check every month, you can probably have
your bank mail out a certified check every month for a pretty reasonable fee,
or perhaps even for free.

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Tangurena
Some apartment companies already do take rent payments online. But those are
the more modern companies who tend to cater to younger folks.

In general, folks who run the majority of apartments aren't too interested in
fancy new stuff, as much of the fancy new stuff that gets pitched to them are
thinly disguised plots to swindle them out of something.

Management companies, depending on the size of the apartment complex already
suck between 5-10% of the gross receipts off the top. Adding the transaction
costs for online payment (usually close to the costs of a credit card, so
they'll be in the 1-3% range), and a marginally profitable apartment complex
can quickly go into the red with cash flow problems.

The apartment complex I live in tends to have a bimodal age distribution.
We're close to a private university, so there are a bunch of younger folks,
but there are also a lot of older tenants. I've been here 5 years (some bad
credit stuff rolls off my credit report late this year, so I can start looking
for a house about the beginning of 2010), and among the longer term tenants,
I'm one of the few who are "into" computers enough that I'd consider EFT.

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rbarooah
I've paid my rent online in the US for the past 7 years - with 4 different
landlords using PayTrust, which simply prints and mails checks automatically.
It also scans paper bills, and gives a lot of control and feedback to stop
things going wrong, so it's better than most bank-based bill pay services.

Like most of the other UK people, I was very surprised about the lack of a
direct debit equivalent over here. A major issue is that in the UK, consumers
using Direct Debit are strongly protected by law which compels merchants to
return the money in the event of a dispute. In the US, no such protections
exist, so if the merchant (or landlord) overchaged, you'd be at the mercy of
their dispute resolution procedures and the courts.

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yalurker
I already pay my rent online, as well as have an interface to request
maintenance or ask questions to the management company. This is in the US. I
can pay by direct bank withdrawal for free, or pay a fee to use a credit card.

My apartment complex uses this system: <http://www.propertysolutions.com/> As
an end-user of the system, I am completely satisfied.

~~~
ramoq
There has been some mention of some companies trying to solve problems in this
space. But I return to the fact that this problem is still largely unsolved.
My evidence is the fact that almost NO ONE I know pays rent online. If a
solution exists it's complete lack of adoption hints at the fact that there
are serious flaws in it's execution.

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Aevin1387
The complex I live in allows payments online both through bank tranfer, and
credit card payment, and have done so since I first moved in two years ago.
The system they use is through <http://realpage.com/onesite/> and until this
month, they charged a $10 processing fee for all online payments.

