Perks lure tenants to online rent payments

Aside from convenience and cost savings, there are rewards

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Nov. 16, 2012

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Aside from convenience and cost savings, there are rewards

Steve Bergsman
Inman News®

About six years ago, Steven Van Praagh received a call from a friend who owned a couple of rental properties in the Harlem area of Manhattan. Praagh, who was a commercial website developer, listened to his friend's rant about being sick and tired of dealing with paper checks for rent payment.

What his friend really wanted to know: Was there a way create a payment service online?

Praagh listened, and then asked, "Would this be like PayPal for real estate?" And his friend's response was, "Yeah, exactly."

Six years later, ClickPay is a bustling business. In short, the company provides property owners and managers the ability to accept secure online payments (rent, homeowners association fees and dues, maintenance fees, etc.) from residents via e-check, credit and debit card. 

Steven Van Praagh

What apartment owners and managers like about ClickPay is that they don't need a bunch of workers to hang around opening envelopes, processing checks and visiting the bank. What tenants like about ClickPay is that it saves them time. They don't have to write a check and drop it off at management.

Tenants who use online banking to mail their checks think they are paying electronically. In reality, a paper check still gets mailed, Van Praagh said. "What ClickPay does is form partnerships with the banking networks to keep the payments electronic. The banks like it because they save the on postage."

In New York, where rents can easily be four or five digits, it has become a marketing tool for the landlords.

This is the way it works. Let's say you are an owner of 750 apartment units in 10 New Jersey buildings of 75 units apiece and you want to use ClickPay.

Someone from ClickPay interviews you to figure out the size of the portfolio, management and types of tenants, as the company wants to make sure ClickPay is marketable to those same tenants. Then ClickPay talks to property management about accounting software to make sure its program can integrate. Once all that happens, ClickPay offers a couple of different services.

Once live on the system, ClickPay does customer training for all bookkeepers, controllers, property managers and asset managers. There are no setup fees or set costs.

Finally, tenants get a note to let them know their rent is due. ClickPay will send rent bills, including emailing a PDF of the bill. In the invoice there is a link that says, "Pay Your Rent Now." If tenants click on that link, they will be forwarded to the ClickPay website. All they have to do is check in, change the password and take over their account.

Other tenants in other buildings can use the search engine, find their complex and see if ClickPay is available. If so, they find their unit, put in the leasing information, and as long as it matches up, they can use ClickPay.

Although ClickPay works with more than 100 property management companies, a couple of real estate investment trusts, Apollo Real Estate Advisors and hundreds of thousands of tenants, you've probably still never heard of ClickPay or its payment system. That because it is still Northeast-centric.

"We work with 10 percent of the top multifamily managers in the country, but in New York, we have 30-40 percent of the top managers," Van Praagh said. "We have deals with most of the who's who in New York."

ClickPay's penetration in the Big Apple is partly due to the fact it was the first 100 percent electronic payment system offered in the city.

"There were other lockbox services that had other types of electronic systems, but we were the first totally paperless," Van Praagh said. "We are still the only one in New York."

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