Late Fee policies

[Brandon Ja]

Good morning everyone.  New to rentals and it’s been 20 years since I have rented a place myself.  Looking for ideas on how to structure my late fees and what you charge.  Do most people charge a set amount or is it better to go with a percentage of the rent?  Do the fees add up daily or do you use a different rate?  Any adivice would be appreciated.  Thanks in advance.

[Drew Sygit]

Quote from @Brandon Ja:

Good morning everyone.  New to rentals and it’s been 20 years since I have rented a place myself.  Looking for ideas on how to structure my late fees and what you charge.  Do most people charge a set amount or is it better to go with a percentage of the rent?  Do the fees add up daily or do you use a different rate?  Any adivice would be appreciated.  Thanks in advance.

Check your local regulations, but recommend making the Late Fee a percentage of the rent - like mortgage lenders make their Late Fees.

Also, if allowed, have a Daily Late Fee that kicks in after another X days.

Once had a tenant "teach us a lesson" when the got even with us for not waiving another late fee for them. They started paying at the end of the month as there was no additional penalty and they've pay before we could get an eviction court date. 

You could also offer a Rent Credit if they pay before due date. Or offer both Rent Credit and then Late Fee.