Commercial Real Estate
Rent Collection Trends in Commercial Real Estate
Automation and digitization can make managing properties and rents easier—so what’s holding the industry back?
Rent collection software can help real estate owner/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 collection trends, we polled 130 experienced real estate professionals.
- Owner/operators need a compelling reason to adopt rent collection software. Most owner/operators 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 owner/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
Attitudes on Technology
Technology’s convenience, speed and ease of use are top priorities for roughly half of respondents.
When on the go, they use a mobile device to perform their office tasks
Software must provide immediate access to real-time information
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. Some also consider the cost to be prohibitive.
This type of software does not make sense for the size of the business
The business is able to run smoothly without this type of software
They are not familiar with this software
The cost of this type of software is prohibitive
Drivers Behind Rent Collection Software Adoption
Nearly half of property management or rent collection software users learned of their software solution through a recommendation from someone else in the industry (24%) or through industry media (24%).
Of the 38% of respondents who use property management or rent collection software, providing payment alternatives to tenants was the most common reason for adoption. Efficiency and affordability were close behind.
Affordability of software
Reduced time and cost to collect and record rents
Ability to offer payments alternatives to their tenants
Reduced time to receive funds
Popular Software Features
Allowing tenants to set up autopay is by far the most important feature to all respondents. But it’s not the only popular feature.
Fund access within 24 hours
Deposit rent and additional monthly charges into one or multiple bank accounts
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 Help Owner/Operators Save time and Money
What drives their continued use of the software?
They are better able to manage the rent collection process
They are saving money over manual procedures
They see an increased number of on-time payments
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.
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.
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.
of other accounts dedicated to property business (i.e. reserves, deposit accounts, etc.) hold $100K or less; the average account balance is $285K.