The Innovators: Till Inc.

In this series, Bisnow highlights people and companies pushing the commercial real estate industry forward in myriad ways. Click here to read Q&As with all the innovators Bisnow has interviewed so far.

Sometimes innovation comes when innovators realize that a particular long-standing and generally unquestioned business practice causes a problem that they can solve, or at least ameliorate, using a new approach.

David Sullivan and Brady Nolan, both with backgrounds in residential real estate, came to the conclusion that the practice of requiring tenants to pay all of their rent on the same day every month often proves harmful for both landlords and tenants, particularly those who fall even a little behind. They thus created a tech platform, Till, to help both sides cope with the persistent fallout and sometimes hardship from the drumbeat of monthly rental deadlines.

Sullivan, now Till CEO, founded the company in late 2017, and not long after, Nolan joined as co-founder and chief growth officer. With venture backing from Route 66 Ventures, Metaprop Ventures and NextGen, they devised Till to include elements of both proptech and fintech that allow tenants to customize their rental payments across each month to be more in line with their incoming cash flow so that before long, they can meet their obligations on time.

"We've been called a financial adviser for renters, the heart of which is optimize payment structures to align residents' rent to their income," Nolan told Bisnow. "So they'll pay rent based on how many paychecks they have throughout the month, making it far easier to pay."

As a platform, Till engages with renters in advance of every monthly payment by establishing what is functionally a rent-only savings account for each tenant who signs up for the service, and confirming that the money is there before it is applied to rent, Nolan said. 

That is only part of the platform. Till is more than just a way for on-time renters to align their payments with their income, Nolan said. It is also a tool to help those behind on the rent to catch up, especially if the issue isn't a lack of current income, but simply a previous period in which income stopped because of temporary unemployment or other problems, a situation all too prevalent because of the coronavirus pandemic.

"Our system helps them catch up, rather than coming down on them hard with late fees, since landlords agree to defer the fees while they are enrolled," Nolan said.

Of course, customized payment plans for tenants aren't new. The innovation Till represents, for both landlords and tenants, is that it automates the process. While enrolled, tenants have protection against late fees, as long as they are current with their payment plan. Landlords, for their part, may forgo late fees, but they don't have to deal with payment plans on a case-by-case basis, and the system encourages tenant retention. 

That is at the core of what Till does, and it has earned the company the title of Bisnow Innovator.

This interview has been edited and condensed for clarity.

Bisnow: Are landlords showing an interest in Till?

Nolan: Yes. We have formed partnerships with bigger institutional rental housing owners and operators. We aren't yet in the more mom-and-pop space, but there's a big opportunity there as well. At some point in the future, we'll address that, but for now our partners are large institutional owners. 

Bisnow: How big are we talking?

Nolan: We've got about 40 partnerships with owners and operators that control over 1.3 million units.

Bisnow: Why would a major landlord be interested in your platform?

Nolan: The challenge we're addressing is that, from a payments perspective, there are different types of renters. There are those who always pay on time, but also folks on the margins who sometimes pay late. Sometimes they're at risk of default, and there are more of those people today than ever before.

For the operator, there's very limited data to predict who is who, and work with the renters in advance of the rent payment being due. They don't know what's going on with their renters after they move in, and have to rely on their people on-site — who might have no data and very little training — to work with tenants to collect rent. That's cumbersome and time-consuming. The operators are essentially stuck with using what you might call blunt-force policies, such as late fees and, in worst-case scenarios, eviction filings. 

It's an enormous problem. There's $50B of late rent paid every year, and $5B in late fees paid every year, and 5 million families are evicted every year. That's the current state of affairs. It all costs owners and renters a lot of money.

Bisnow: So tenants get budget management help to pay in a timely way, and landlords get the predictability of knowing that?

Nolan: We've built a data and analytics platform on the renters who sign up. We know in real time what's going on with their cash flow and what their rent is, and when it's due and all of that, and we use that information to set them up to have all their rent paid. We also take those delinquent renters and catch them back up. So the landlord gets more money on time, and the renter has a far better payment experience. 

Bisnow: Why would a renter sign up for your service? It is the renters who pay a fee to do so, correct?

Nolan: That is correct. The renters pay for the service, but considering what they get, it isn't very much. In fact, it's only $15 a month until a renter is caught up, and it's free for on-time payers.

A renter who is a good on-time payer still benefits from Till's flexibility. We help them through budgeting and saving in advance. We set up rent-only savings that the renter budgets to pay into in advance, and which pays rent on the first of the month as usual.

As for renters who are behind, every one of their payments includes an additional payment amount, customized to their ability to pay, to get them caught up as fast as possible. We see five to six times higher engagement with Till than we do with any payment plan that the property offers them. So that is a win for the landlord as well, because at the end of the day, they're going to collect way more money than they would if they didn't work with that renter.

Bisnow: Your system also seems to change the psychology of renting, at least for the renter.

Nolan: Yes. For tenants who come to us behind, we've been successful at helping them catch them up. Our landlords' on-time collections rates are significantly increasing. 

Till frees rent from being a binary decision of you either pay it or you don't the day it's due. Say a month's rent is $1,600. Every day I don't pay it in full, it's getting harder for me to pay in full and eat, and late fees increase the cost even more.

Whereas with Till, I can make that $400 payment the first week, and then you've kind of committed yourself to the same amount each week after that. The money is going to be there when the rent is due. It's committed ahead of time, and the renter knows it. So does the landlord. 

So you pay the next week and the next, as money comes in, and the platform helps you keep track of that, because your plan is customized for you. By the end of the month, you feel that this is a much easier way to pay. Once it's set up, it's fully automated, and that eases the process for both tenants and landlords.