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Resident financial amenities: Proptech leaders share trends & strategies
Due to a renewed focus on the customer experience and resident loyalty, resident financial amenity offerings are on the rise. From flexible rent payments to instant emergency funds to credit history building, the question is no longer if multifamily should offer financial amenities but which ones. During the recent webinar, Why Every Property Should Provide Resident Financial Amenities, three leading proptech CEOs explored the current amenity trends, their potential impact, and how properties can decide what’s best for residents and portfolios.
Resident financial amenities are more common than a year ago
Having recently returned from Optech, all three panelists agreed that the number of proptechs focused on resident financial amenities has dramatically increased. And that while some properties are wrestling with what role to play in their residents’ financial lives, many have started actively seeking solutions that make renting easier, more flexible, and rewarding.
“We used to have to educate groups we spoke with about what rent rewards are,” said Lily Liu, CEO of Piñata Rent, a rent rewards platform. “We’ve been finding this past year that we’re not having to educate people about rent rewards or building credit or alternative ways to paying their security deposit.”
Another difference is that “many properties are now looking for ways to add amenities in a cohesive way vs as a shotgun offering,” said Chanin Ballance, CEO of Roost, a cash deposit automation platform with built-in financial amenities. According to Ballance, because portfolios typically include a variety of property classes and varied renter demographics, owners and operators are thinking more strategically and holistically than in years past.
Resident financial amenities build resident loyalty
“Properties want more engaged, responsible residents who stay for a while,” said Leslie Hayle, CEO of Circa, a modern rent payment platform. “They have to respond to the needs and wants of the renters and that includes offering modern, valuable amenities.”
The panelists shared that financial amenities can directly support the financial stability of renters — by smoothing out cash flow, giving them options of when to pay rent, building credit history, earning rewards that turn into savings, or even by earning interest on their security deposit. But financial amenities also encourage and reward behaviors that directly benefit properties, like residents taking better care of their units, renewing leases early, and reviewing and referring.
“If landlords make renters feel valued and deliver valuable benefits that make a difference to renters’ daily lives and financial goals, then these happy renters will be more valuable to the landlords’ business,” said Liu.
Measuring impact on resident financial health
Despite an increase in the number of properties offering financial amenities, Ballance shared that some operators still question whether “the financial amenities on the market really move the needle for their residents or [if the properties] are just being used as a sales channel by fintech.”
Part of the problem, said Hayle, is that many properties often don’t have the tools to accurately analyze their own data. But, she added, proptech does. “We’re bringing technology that is pretty well developed in other industries to multifamily.”
Ballance said that 86% of renters who use Roost’s deposit advance feature report decreased levels of financial stress or felt more financially secure, and 57% say it helped them avoid a late fee. In addition, 85% report that having access to their deposit money positively influenced their feelings toward their property manager.
Piñata renters, said Liu, are 10% more likely to pay rent on time and though the findings are early, they’re also seeing an average credit score boost of 34 points. Circa, meanwhile, has found that of those residents who usually paid rent late, their flexible rent payment offering has improved collection within the month by four times.
Bottom line impact for properties
While improving renter financial health is motivating for many properties, all panelists agreed it’s still about the bottom line and that there are three ways financial amenities can help.
Improved operational efficiency
With property manager turnover so high, many properties are examining how financial amenities can improve operational efficiency while also supporting residents.
“The properties we talk to care about collecting rent, they care about collecting rent on time, they care about collecting rent regularly,” said Hayle, “but what we deliver to them that’s even more important than that is efficiency.”
The challenge is how to show a quantifiable ROI, said Ballance, so having a dual value proposition is critical to getting properties to offer financial amenities for residents. “Roost cuts the in-house costs of in-house security deposit management by about 80%. That’s a significant component to them buying Roost.”
Charging renters for financial amenities
Liu shared that Piñata is seeing more properties experiment with how to pay for these new financial amenities—is it a cost properties should bear or can they offset it to their residents?
“It’s been interesting to see this shift of groups saying I’m going to use this as a revenue center,” said Liu. “We’re seeing a trend where properties are adding in a renter benefits package or an ancillary services package. They’ll bundle in everything from a Yardi to Piñata.”
Liu said this approach may free up properties that might normally be pretty limited in their ability to rollout or add these types of resident benefits.
Proptech revenue sharing
Whether revenue sharing becomes a standard part of implementing financial amenities is yet to be determined. Both Piñata and Roost are experimenting with revenue sharing with some of their larger partner relationships.
“We’re still feeling it out honestly,” said Ballance. “And how to make it a win-win for properties and their residents.” What is clear, said Ballance, is that just offering financial amenities for the residents’ sake isn’t enough. If those amenities cost the property money or there isn’t a clear ROI, they won’t offer them.
“That might change over time, but that’s the challenge for financial amenities—to show the quantifiable value to properties,” she said.
Advice for properties considering offering financial amenities
Look for financial amenity products that are a win-win for both properties and residents. “There are enough out there that you can filter,” said Ballance. And bring your residents into that decision-making process. “They will tell you if they think an amenity is valuable to them or not. Be prepared for it to vary by demographic or property.” Ballance also noted that properties will need to offer financial amenities in some form or another “because the property down the street is. It’s really about finding the right mix that makes a difference for your business.”
As properties bring on new technology, Hayle recommends properties stay focused on customer service. “We hear from thousands of residents who contact us asking to use Circa. What they care about is the ability to reach somebody. Service is critical. These are people and their homes and we have to support them in a way that matters.”
Liu recommends thinking through the implementation, at the local level, to ensure residents are well-educated on the new services and that it’s easy to sign up. “Onsite teams need to be really plugged into the process,” said Liu. “That’s one of the biggest keys to our successful implementations—when we get that direct line of communication and can show the benefits to property managers.”
For more insights, trends and learnings, watch the full 30-minute panel discussion here!