A new direct-debit rent collection system that significantly reduces the amount of time agents spend chasing late or non-payment of rent, and that takes tenants “minutes to set up” has been launched.
Created by Lincoln-based firm PAID & CO, which is part of the Barbon Insurance Group that owns Homelet, the system uses a “socially positive incentive” carrot-and-stick approach to reward regular payers.
The PAID & CO system is a cloud application and replaces traditional standing orders, which can be cancelled by tenants in order to avoid paying rent, with a web-based tool that uses BACS payments.
“Financially astute tenants often cancel standing orders ahead of when rent was due, effectively using their rent payments as an ‘unofficial overdraft’ to help meet other living costs,” the company says.
Its system rewards regular rent payers with better credit scores across the UK’s three main reference agencies, SMS and email reminders of when rent is due, real-time direct debit cancellation alerts for agents and a payment ‘retry’ service.
The company quotes recent Homelet research that shows half of all landlords have had a ‘problem tenant’, that two-thirds of difficulties with tenants involve rent arrears and that 68% of landlords have experienced problems with late payments.
It is claimed that the tech developed by PAID & CO enables letting agents to identify serial non-payers more quickly, rather wasting time chasing tenants who have forgotten to pay their rent.
Paid & Co also provides client letting agents with a real-time dashboard of payments, allowing quick and easy reconciliation.
“The use of technology, along with easy to implement direct debits, has greatly benefited other sectors – our goal is to apply similar technology to create a major step forward for the letting market,” says Tim Rooney, CEO of PAID & CO (pictured, left)
“We designed our system to remove the hassle from rent collection and, through greater transparency, foster a positive, collaborative approach between letting agents and tenants. Letting agents will have much less administration, and tenants will get recognition of good rental payment which will support an improved credit rating.”