“We are really playing around the rent payments experience. In the United States, rent is a $700 billion payments industry. It’s the largest single payments industry
in the world. So on a macro level, I’m excited, because we have a huge opportunity ahead of us to build a really big and special business.” said Nolan. “There’s $50 billion of late rent paid every year. $5 billion of late fees paid every year. We’ve got a big opportunity to help lots of people.”
Till’s core platform is called “Flexible Rent.”
“The idea is, rent and the policies that have been created around rent have been incredibly inflexible since kind of the dawn of time. We have introduced a platform that sits on this incredibly advanced technology and data analytics platform, really deeply understanding each individual renter sitting in every one of the communities in which we operate.”
Till has a few goals: It wants to improve the rent payment experience; it wants to solve problems around payment timing; and based on thousands of renters’ testimonies, Till believes one of the biggest challenges is how inflexible rent is.
Nolan points out that rent is due at the first of the month, which is the point when the average American has the least amount of money in their account.
“I say as a joke often – but it’s not really a joke,” said Nolan, “we’ve tried to make it as hard as possible for our renters to pay us.”
Till helps people who normally pay their rent on time budget for how to pay for rent. It supports them if they run into a short-term pitfall. It also helps design schedules that are tailored to each renter. From there, it supports people on-site. It’s also as straightforward and easy to use as possible.
“In every community where Till is offered, we’d like to see 100% of rent collected
on the first of the month. And we can do that by having a platform of tools which meets each renter when they come to work with Till. It meets them where they are. It helps them stay ahead if they’re ahead; it helps them catch up if they’re behind. And there’s tools like credit boosts to help catch them up or fill any short-term gaps,” said Nolan.
He says that can’t be done with a one-size-fits all system. But when Till works with individuals, renters’ payment success rates are 97%+ in just the first month, and 100% by the third month of enrollment. Understanding your cash planning and your expenses proves very helpful.
These challenges existed before the pandemic, and still will after it passes. 60% of Americans have less than $400 in savings, and the average American experiences income volatility with at a quarter of their earnings. 50% of their post-tax income goes to rent. That makes budgeting and saving to be extremely challenging.
Right now, properties are not set up to manage different types of renters. But it starts with understanding the individual.
“Today, the way we work with renters is, we manage their collections through things like late fees, things like eviction filings, which are designed to be sticks to get renters to pay on time. But when they don’t work, when the renter misses that payment, they often just exacerbate the chance that that renter falls behind,” said Nolan.
Having a tool designed to support your teams on-site and give the renter something that is positive and designed specifically for them has been extremely helpful. These systems are proactive, rather than reactive, asking ahead of time if they might need a payment plan.
Nolan says Till was the first company to create a rental loan, where it would front money for renters who qualify. From there, they’d have a set amount of time to pay it back. A bunch of people used the product as a tool for flexibility.
“The fact is, renters that can be very predictable, very reliable on-time payers shouldn’t have credit as their tool to get them a little bit more flexibility. It should be more diligence, more balance, and committed savings. Renters that are too far behind will never qualify for that product.”
At the end of the day, this helps the money come in on the first of the month.
“When we really boil it down and share the data and walk you through, there really isn’t anything else that can compare,” said Nolan.
There’s another new facet of income and rent payments: “The idea that the W-2 is the sole source of income is just not true anymore,” said Nolan.
Because of that, the screening for renter risk needs to evolve. A glance at a pay stub when the person first signs a lease and then a hope the person renews isn’t enough.
“We only ever know what’s going on in our customer’s financial life once up at the beginning of that relationship. That affects how we set them up in the home, how we work with them, how we risk-manage, how we service. It’s all reactive.”
Integration with the customer’s bank accounts and real-time analytics shows that payroll income is a meaningful percentage but is really only 60 or 70 percent of income these days. Timing within the month also matters, because freelance gigs might not line up with when they’re getting paid from their main employer.
“We work with renters to make sure that the timing of their payments is in the most optimal state to keep rent the priority expense. What I mean by that is, as soon as income hits the account, the money for rent should be coming out and paid to the property or prioritized to the property before it goes somewhere else. That’s how we ensure payment success.”
Till believes it has two masters: the owner/operator and the renter.
On the owner/operator side, it only takes about 9 days to set Till up. The set-up period
has to integrate with the property and with the renters. The communication with renters should be as automated as possible. Enrollment is optional. But Till can only help the property if renters are enrolled, so communication about it has to be effective. From there, Till’s team trains up the on-site team for the property.
Till has found that property managers spend 1-3 hours per week per late renter trying to collect payment. Till saves between 50 and 90% of that time.
“Nobody got into that business to be a debt collector. They got into that business because it’s a people business. They want to create really positive relationships with their renters, and that’s what the residents want. So we spend that training time and post-launch time with a full team that really manages their on-site relationships to make sure we are empowering them with time to go create those relationships with renters.”
Nolan says they get feedback from residents frequently. One complaint is that people who pay on time say they never hear from their property managers; on the opposite side, people who often pay late feel like they only hear from the staff when they’re demanding money. This helps alleviate that tension.
Nolan says he always asks how people are doing and what’s been going on recently. At first, people say they’re doing surprisingly well; but then, they’ll go on to say delinquency has increased. Nolan points out, that doesn’t mean things are good, it just means your expectations were low.
Through the pandemic, optimism had waxed and waned. How well a multifamily community is doing also depends on location and the jobs that are most commonly found in each area. Some properties in the middle tier have done quite well, as people move from more expensive properties and seek out a lower price point. In contrast, urban areas have struggled quite a bit.
Multifamily is resilient, but innovation can help.
Nolan says this is a very exciting time for this industry. Innovating businesses are starting to grow.
“We generally really believe that the rising tide raises all boats,” said Nolan. “You guys, as operators, should be utilizing technology platforms in your properties. We believe wholeheartedly that the relationship between the renter and – I try to avoid the term ‘landlord’ as much as possible – the operator has been kind of combative for a long time. It’s kind of been that the power is in the hands of the operator.
One of the North Stars here at Till is, everything we do has to be positive for the renter. Probably 99% of things that fall into that bucket are a net positive for the property.”
Nolan says that by setting residents up to succeed, the property will make more money and the staff will be happier in their jobs. The experience should improve holistically.
Connect with Brady and Till: