James Maddock manages student houses in Nottingham. When the Renters' Rights Act limited rent in advance to one month, he moved his tenants onto Direct Debit with Adfin so he could see straight away if a payment was at risk.
At a Glance
How Octinet moved its tenants to monthly rent
Octinet is James Maddock's student lettings business in Nottingham: two six-bed houses and 144 rent invoices a year.
When the Renters' Rights Act limited rent in advance to one month, James moved his tenants onto Direct Debit with Adfin. He now collects all of his rent through Adfin and can see straight away if a payment is at risk.
Before Adfin
With Adfin
Challenge
Twelve payments a year instead of three or four
For years, James took rent from each tenant quarterly or termly, in line with their student loan payments, by standing order or bank transfer. The Renters' Rights Act changed that. Landlords can no longer take more than one month's rent in advance, so each tenant went from three or four payments a year to twelve.
More payments meant more admin, and more risk. With standing orders and bank transfers, the only sign of a problem was a payment that didn't arrive. On monthly rent, a tenant could be two or three months behind before James was able to start dealing with it.
Direct Debit was the obvious answer, but the banks weren't set up to help a landlord of his size.
“Being a small business, the banks aren't interested in making me a Direct Debit agent. They want organisations processing thousands, if not tens of thousands, of Direct Debits a year.”
James Maddock · Owner, Octinet
Solution
Every payment, and every risk, in one place
James heard about Adfin from his accountant, who had moved her own practice onto the platform. He now collects all of his rent by Direct Debit through Adfin.
A failed payment or a cancelled mandate now shows up straight away, so he can speak to the tenant, or their guarantor, before arrears build.
“It gives me visibility early doors. If they're unable to pay a Direct Debit or if they cancel a Direct Debit mandate, that's a red flag to me and I can immediately get onto them.”
James Maddock
Tenants also get notice before each payment is taken, which gives them the chance to flag a problem and agree a plan. Tenants who'd rather pay by card can do that too.
“The main thing I wanted was the automation of rental collections, and a single place where I can see who has paid, who hasn't paid and who's at risk. Adfin is giving me all of that.”
James Maddock
Results
Monthly rent, with no failed Direct Debits
Since going live, Octinet has scheduled more than 100 Direct Debits and none have failed. Each tenant has gone from up to four collections a year to twelve, with no delays.
The Renters' Rights Act means monthly rent for every landlord, not just student lets. For small landlords without access to bank Direct Debit facilities, that's twelve chances a year for a payment to slip.
“Like anything in life, if you have an open dialogue, typically you can resolve situations and it becomes less contentious.”
James Maddock
Adfin takes care of the collections, so James can get on with running his properties and looking after his tenants.