Understanding Appfolio Credit Card Payment Fees
Appfolio is a popular property management software solution, streamlining everything from tenant screening to rent collection. One of its key features is the ability to accept online payments, including credit card payments. While convenient for both landlords and tenants, understanding the associated fees is crucial for managing your finances effectively. This post breaks down Appfolio's credit card payment fees, helping you make informed decisions about how you handle rent collection.
Navigating the world of payment processing fees can be confusing. Different platforms have different structures, and Appfolio is no exception. By understanding these fees, you can avoid surprises, optimize your payment collection strategy, and ensure you're not unnecessarily eating into your profit margins. We'll cover the different types of fees, who typically pays them, and strategies for mitigating their impact.
Let's dive in and demystify Appfolio's credit card payment fees.
Who Pays the Fees? Landlord vs. Tenant
The first and most important question: who is responsible for covering the credit card processing fees? The answer isn't always straightforward and depends on your Appfolio setup and your state's regulations.
Tenant Pays: In many cases, the tenant will bear the burden of the convenience fee associated with paying rent via credit card. Appfolio allows you to configure your settings so that a service fee is added to the tenant's payment when they choose to pay with a credit card. This is often the preferred option for landlords, as it avoids impacting their revenue.
Landlord Pays: If you choose to absorb the credit card processing fees yourself, you'll need to factor this cost into your overall business expenses. This might be a strategic decision to encourage online payments or to remain competitive in your market. However, carefully consider the impact on your bottom line.
Split the Fees: While less common, it might be possible to negotiate a split of the fees with your tenants, although this could create friction. Transparency and clear communication are essential if you choose this route.
Important Note: Always check your local and state laws regarding rent payment methods and fees. Some jurisdictions have regulations regarding convenience fees or restrictions on requiring tenants to pay online.
Types of Credit Card Payment Fees in Appfolio
Appfolio's fee structure for credit card payments is relatively transparent, but it's important to know what to look for. Here's a breakdown of the typical fees you'll encounter:
Convenience Fee (Tenant Pays): This is the fee charged to the tenant when they choose to pay their rent using a credit card. This fee is usually a percentage of the total rent amount. The percentage can vary, so it's crucial to check your Appfolio settings to confirm the exact rate.
Processing Fee (Landlord Pays - Sometimes): While less common, there might be instances where the landlord incurs a processing fee, especially if they offer incentives for online payments or absorb the tenant's fee. This fee is typically a percentage of the transaction amount plus a small per-transaction fee.
ACH (eCheck) Fees: While not technically a credit card fee, it's worth mentioning ACH fees. ACH payments are often a cheaper alternative to credit card payments. Appfolio typically charges a smaller fee for ACH transactions, which can be a more cost-effective option for both landlords and tenants.
Finding the Exact Fee Information in Appfolio
Knowing the potential fees is one thing; knowing the actual fees you're being charged is another. Here's how to find the specific fee information within your Appfolio account:
Log in to your Appfolio account.
Navigate to the "Settings" or "Company" section. The exact location may vary slightly depending on your Appfolio version.
Look for "Online Payments" or "Payment Processing" settings.
Within the payment processing settings, you should find details about the credit card processing fees and ACH fees. This section should clearly outline the percentage charged for credit card transactions and whether the tenant or the landlord is responsible for the fee.
Review your monthly statements. Your Appfolio statements will provide a detailed breakdown of all transaction fees incurred during the month. This is a good way to double-check your settings and ensure you're being charged correctly.
Strategies for Mitigating Credit Card Payment Fees
While you can't eliminate credit card processing fees entirely, there are several strategies you can use to minimize their impact:
Encourage ACH Payments: Promote ACH (eCheck) payments as the preferred method. Since ACH fees are typically lower than credit card fees, this can save both you and your tenants money. Highlight the convenience and security of ACH payments.
Offer Incentives for ACH Payments: Consider offering a small discount or other incentive to tenants who choose to pay via ACH. This can encourage adoption and reduce your reliance on credit card payments.
Negotiate with Appfolio: Depending on your volume of transactions, you might be able to negotiate a lower processing fee with Appfolio. It's worth contacting their customer support team to explore this possibility.
Factor Fees into Rent: If you choose to absorb the credit card processing fees, factor them into your rent price. This ensures that you're covering your costs without surprising tenants with unexpected fees. Be transparent about this in your lease agreement.
Consider Alternative Payment Methods (with Caution): While less common with modern software, explore alternative payment methods like money orders or cashier's checks. However, be aware that these methods can be less convenient and may increase your administrative burden.
Be Transparent with Tenants: Clear communication is key. Explain the credit card payment fees to your tenants upfront and provide them with alternative payment options. This can help avoid misunderstandings and maintain good tenant relations.
Common Mistakes to Avoid
Not Understanding the Fees: The biggest mistake is simply not understanding the fees you're being charged. Take the time to review your Appfolio settings and statements to ensure you're aware of all costs.
Violating State Laws: Failing to comply with state laws regarding rent payment methods and fees can lead to legal trouble. Always research and adhere to local regulations.
Surprising Tenants with Fees: Springing unexpected fees on tenants can damage your relationship and lead to disputes. Be transparent about all fees upfront.
Ignoring ACH Payments: Overlooking the benefits of ACH payments is a missed opportunity to save money. Actively promote ACH payments to your tenants.
Conclusion
Understanding Appfolio's credit card payment fees is essential for effective property management. By knowing who pays the fees, the different types of fees, and how to find the information within your account, you can make informed decisions and mitigate their impact. Remember to prioritize transparency with your tenants and always comply with local and state laws. By implementing these strategies, you can optimize your rent collection process and improve your bottom line. So, take the time to review your Appfolio settings today and ensure you're managing your payment processing fees effectively.