Electronic Rent Payments

Being new to Appfolio, I am about to get my property set up to take electronic payments for rent.

I am concerned about partial payments. What is the best way to get full payments and late fees from tenants when the software will accept any amount?

At my "sister" property across the state line, they cannot file evictions if a partial payment is made. They also cannot charge more than 5% late fee. The owner wants to accept partial payments, too.

Does anyone charge a "partial payment" fee?

Need some "Insider" help on this one!

Hey Sandy;

Let me state that I really like Appfolio; it does the most for you and I like the abilities that Appfolio has incorporated: Renter's insurance, online and cash rent payments as well. I do not like the fees attached to credit card or cash payments, even if the card used is a debit card, but residents can get around the fee by doing an electronic check.

As far as partial payments, I would only allow them in the following situations:

1) Rent is not already late,
2) There is not a balance owed on the ledger from a prior month (late fees, damage, whatever), OR
3) There are multiple household members that divide the rent among themselves (roommates).

You can set up your online payment features to blanket rules 1 and 2 to the entire property and allow 3 on a household by household basis and set that rule up on the household at the time of move in. Alternatively, you can suggest that households in that scenario give their shares to one of the members and that member makes the rent payment directly: Say you have Jim, Joe, Mary, and Alice that divide the $1200 monthly rent equally; this gives each person the responsibility for $300. Jim, Joe, and Mary can give Alice their shares on the 1st, and on the 2nd, Alice makes the online payment and prints the confirmation for the others to see that it is done.


Enjoy Appfolio!

Looking at ways to motivate tenants to pay on time when the state only allows a 5% late fee. Here is what we have come up with so far:

1. Giving concessions off the market rate to renewing tenants and new tenants. A "Concession Addendum" is signed and tenants agree to the discount, only if they pay on time. For example:
a. Market rate is $800
b. Tenant is offered a monthly rate of $750 ($50 off the market rate). However if they pay past the
5th, they lose the concession amount for that month plus pay a late fee. Also, if they vacate
early, they have to pay back any concession used to date.
c. Anyone who makes a partial payment electronically is charged a "partial payment processing fee"
that is included in the first installment.
d. Where tenants pay water included with rent, there is a separate late fee for paying the water
late.

We are still looking at the "Re-Marketing Fee." Tenants who we file evictions on would be charged a flat rate fee per day for each day the rent is unpaid for the cost to advertise and re-rent the unit due to the breach of contract.

Hi Sandy,

What is the motivation of Owner to offer online rent pay in the first place? I would encourage online rent payments by credit card only because residents who may be experiencing a financial issue one month (like paying car repair bill) might be able to pay with a credit card, thus incurring no late fees. So, if the Owner is looking for this option, offering the option is beneficial. We all know that offering credit card payments on your own can mean increased operational costs to cover the fees the credit card company will charge back.

It sounds to me like, and I could be wrong, that the Owner is upset because there is a cap on the amount of late fees you can charge. Having worked with many renters who cannot meet their monthly obligations for various reasons, I can tell you, there is no advantage to charging huge late fees, except that in most states these can be written off.

Last, I am curious as to what the offer of a concession is all about? If the unit rent is $800, why do you want to lower the value by $600 per month? IT seems to me that the value is at $750 then, not $800. I understand the concept of the concession addendum; however, I assume, again that the Owner is willing to do that because he can write off the concession lost but not the rent. People who cannot pay, cannot pay, even with a concession addendum - and then that extra amount may be even more dollars left uncollected when there is a problem with paying.

It sounds like what your Owner is really grappling with Is your area made up of renters with questionable ability to pay? I would encourage the Owner to revamp that resident selection criteria and get rid of the slow payers at renewal time by not renewing. I believe it is better to get rid of them by non-renewal and/or eviction and get people in who will pay promptly. The more rope you extend, the more likely they will be to hang themselves.

If the payment option is only through echeck payment, then you may still encounter declined payments depending on your service provider. The only time I would accept partial payments is - never - but if you must, because the Owner insists, then do it in writing as a Pay Agreement so that if the remaining payment is missed, you can still evict by demanding full payment on the first of the next month.

The biggest motivator I have seen is for residents understanding the eviction process will be followed and offering PRAISE and REWARD for Early Pays. Residents typically really like these programs, including offering Resident Prizes, money off next month rent in a drawing, and Rewards Programs you may have through a vendor (I highly recommend these!)

The problem, Mindy; is that the provider that Appfolio uses to process credit/debit card transactions (they are seen the same) charges the resident a fee of up to $17(I think) to process.

They also offer cash acceptance via 7-11 and Ace cash advance, but a fee of $4 is attached to that as well.

Now, if a resident chooses to use credit or debit cards as the recurring form of payment, I would advocate a monthly credit in the amount of the fee, unless the resident generates a late fee or the card being used is declined for most reasons (an attempt to a card that has since become expired, or needed to be replaced due to fraud or loss would be exceptions and any fees incurred should be waived).