Prepaid is the way to go
Providers of student digs can avoid conflict with tenants when services are paid for upfront
AS THE tertiary academic year gets off to a start, some students are struggling to find accommodation.
Savvy property investors, developers and owners are therefore moving quickly to buy and renovate properties to meet the need.
But while student accommodation might be lucrative, racking up unpaid utility bills can be a serious threat – especially for smaller operators, says Raymond Rorich, Citiq Prepaid’s business development manager.
“When it comes to managing any rental, having a monthly variable in the mix, like utilities, can make payment collection a real headache. Even in the best circumstances, there is often a debate around actual usage versus municipal meter readings.
“For landlords this is not only tiresome, but can lead to disputes and even non-payment. This is exacerbated when you consider students living in communal environments.”
Citiq Prepaid has experience with student needs and working with university residences to find solutions and small business property owners who have converted their properties into communes can just as easily apply the same solutions – prepaid systems.
When signing accommodation contracts, many universities and colleges will require landlords to provide certain amenities as part of their contract. These will include water, electricity and bandwidth, and so Rorich says a pay-as-you-go system is the best way to remain profitable.
“Working with the owners of the student accommodation, we are able to generate prepaid tokens which can be given to the students each month and redeemed on our installed prepaid sub-meters in each room as part of the residences’ monthly bundled accommodation offering.
“By installing a prepaid system, and using smart software in conjunction with our prepaid submetering system, some of our clients have set up tag solutions that allow them to measure students’ communal water and electricity consumption. Once they have used the allocated amount, the students can buy top-up tokens in the usual pay-as-you-go method.”
While it sounds like a regimented system, he says it “massively cuts down on disputes between landlord and tenants – and even between flatmates”.
The online system also gives landlords remote access to usage and transaction data and reports in easy-to-understand formats. Reports are automatically emailed every month, easing the administration burden.
“Prepaid sub-meters provide transparency and reduce risk for everyone. For students, their own electricity consumption is more visible and ultimately more manageable. Moreover, when you can track your consumption from day to day it’s much easier to budget and students can avoid the panicked call to parents asking for additional money,” Rorich says.