Rent Now, Pay Later: What Minneapolis Landlords Need to Know About Tenant Payment Plans

Several years ago a tenant asked if I would allow him to break his rent into two separate payments. He said having rent drawn from separate pay periods helped him budget.

I feared chasing checks every other week. So, I agreed to do it only if payments were made via ACH (Automatic Clearing House); drawn directly from his bank account and put into mine.

Years later, there are now “rent now, pay later” that help tenants pay their rent in installments..

Of the 45 million renter households in the country, over half are considered cost-burdened. According to the Census, that means they spend 30% of their monthly income or more on housing. Rent now, pay later programs allow for the housing provider to get paid in full at the start of the month, and tenants to pay them back over the rest of the month.

The company Flex is the largest of rent now, pay later companies. It currently has 1.5 million subscribers paying approximately $2 billion per month through its platform.  Livble, Qira and more recently Affirm, offer the same services.

The services may charge rent or transaction fees for the loans. For example, Flex charges a monthly fee of $14.99 plus 1% of the payment. Livble doesn’t have a subscription, but it’s fees run between $30 and $40 per month. Affirm’s subscription service funs between $35 and $50 per month.

If a borrower fails to repay the loan, some of the platforms cut them off until it’s fully repaid.

While the median national rent of $1357 is below its peak in 2022, it is still almost $200 higher than pre-pandemic. This is partially a result of low inventory.

Rent payment platforms don’t solve affordability. However, they can help tenants budget and manage their cash flow.