Every landlord and property manager knows that collecting rent can be a hassle. Luckily with systems like RentPost, your life is made easier. We’ve now gone one step further to make the process a little more protective during a potential eviction process.
RentPost supports partial payments. We strongly believe that by allowing partial payments, not only do you increase collections and create goodwill with tenants, but you also get more money in the door sooner. Let’s take an example scenario and break it down.
John is a tenant in 101B. He’s always been a good tenant and paid his rent on time. But, just this past month, John lost his job. He’s now 8 days late on his rent and can’t seem to come up with the full rent amount. His rent is $1500/mo. He does however, want to go ahead and pay $800 and get the remainder to his landlord in 2 weeks.
Now, this can go a few different ways, but let’s make a couple assumptions. First, if you didn’t allow partial payments, and only full payments, John wouldn’t give you $800 today and is less likely to give you $1500 in 2 more weeks. Why? Because of the psychology of getting behind on payments. There is a natural point of no return. Once someone gets far enough behind, they’re less likely to rebound.
So, with that said, you may be thinking, “Great! Let’s get this guy out of here”. Yes, and no. Yes, it’d be great to get him out of that unit possibly, but you’d be missing a couple important notes. Firstly, that could take 60-90 days depending on your eviction process. It could result in a tenant that get’s upset and causes damages to the apartment in spite, and then you’re also potentially stuck with a unit that needs to be marketed and filled. All of this adds up for some unpleasant loss in revenue and potential expenses.
On the flip-side, you could have accepted the $800 today, and hoped to receive the other $700 in 2 weeks. Maybe you would get the $700, maybe not. But it’s much easier for a tenant to come up with $700 than it is $1500. We all know that asking a tenant to hold on to $800 to be paid on rent in 2 weeks when the other $700 is available isn’t the best scenario. They’re much more likely to suffer from the “money burning a hole in their pocket” scenario.
So, what’s my advice? A hybrid of sorts – take the money you can get today and when a tenant hits 30 days late on their account – only allow payments in full from this point forward. I would still begin the formal eviction filings at the usual time, a few days to a couple weeks after the grace period, depending on your company’s policy. It’s possible that taking a partial payment during that 30 day period could post-pone the eviction itself as it’s seen by the courts as a good faith effort to pay. However, I’d argue that the benefits of allowing this during a 30-day period will result in better collections for your company over the long-haul and create better and longer lasting tenant relationships as well.
With that said, we’ve released a new feature today that allows you to set the number of days after a tenant is late to where partial payments are still allowed. If you’re using RentPost’s online rent collection, be sure to check out this setting and tweak to best fit your needs.
Thanks! Let’s keep simplifying rent!