Timely rental reimbursements are becoming increasingly desired by renters as only 35 per cent receive security deposits back within a week.
This is according to findings of a rental disbursement survey by Onbe. The corporate disbursements platform quizzed 807 US renters about their reimbursement preferences.
Responses found how nearly two-thirds of renters preferred to receive reimbursements, such as security deposits, via digital methods (direct deposits, peer-to-peer methods and virtual cards), whilst 41 per cent would be willing to pay a convenience fee for immediate access.
Despite the growing trend towards faster payments, half of surveyed tenants still receive their security deposits via paper checks, signaling a required change for the paper-check heavy rental industry.
“We’re not surprised to learn that renters, like other consumers, want to receive reimbursements for repairs or security deposits via digital payment methods, rather than outdated modalities such as a paper check sent in the mail,” said Bala Janakiraman, CEO of Onbe.
“Our recent future of payments aurvey demonstrated that consumers value choice, speed and convenience, and that extends to the rental industry, where tenants often need prompt disbursements to secure their next home or apartment rental.
“Renters are quick to share their experiences online, and timely reimbursements lead to much better reviews. Additionally, digital payment solutions relieve property owners of the time, cost and complexity of cutting paper checks.”
Speed of action
The law in the US states that when a renter vacates a property, the landlord has between 14 and 60 days to return their deposit.
The process of returning a deposit must take into consideration any deductions that need to be made, including the bureaucracy of moving the figures from one account to another.
In light of this, only 35 per cent of renters reported recieving their deposit within a week of moving out, which is actually faster than the minimum legal requirement.
The aforementioned bureaucracy could be a major contributor to this slowness, with outdated systems of paper trails adding time to the clock.
One of the major disadvantages of recieving a reimbursment back in the form of paper – i.e. a cheque – is that it can be lost. Eighteen per cent of all renters surveyed by Onbe reported accidently throwing out a reimbursement check, and the bad luck increases to 31 per cent among 18 to 24-year-olds.
For renters who received an incorrect security deposit reimbursement amount, a shocking 76 per cent had to wait a few weeks to over a year for the mistake to be corrected, with nearly 44 per cent waiting a month or more.
Mistakes equal time, and almost a quarter of respondents had to delay a move to a new premesis because their security deposit check was for the wrong amount, and they didn’t have sufficient funds for the move.
As a get-around, 41 per cent would pay a convenience fee to get immediate access to their security deposit reimbursement.
The rental property market is undergoing significant changes as rental property owners and administrators face an increasing need for automated payment options.
New disbursement services, specifically digital solutions, offer property managers more flexible payment options and eliminate the need to manually cut checks – saving both time and money while improving accuracy.
As new services make it to market, property managers will not only have the ability to reimburse renters directly, but they will have options to provide incentives and other rewards directly to their residents.
Onbe’s CMO, Kevin Brown explains the benefits of a transition to digital: “With the massive shift to digitisation, consumers want choice and speed when it comes to payments and disbursements. It’s no surprise that 60 per cent of renters prefer to receive reimbursements via digital methods like virtual cards and instant payments, not via paper check.
“For digitally native generations, waiting weeks for a check to arrive in the mail – when most aspects of their lives are instant – isn’t really a feasible option. That’s exactly why Onbe helps companies provide digital payment choices, so they can quickly, efficiently, and safely disburse payments and deliver on their customers’ expectations.”