Hello BP! I have a tenant that pays every month but never on time. He pays the late fee's and is otherwise trouble free. Do I let this go?
My wife and I give out $10 gift cards to out renters if they pay rent in the month before its due. 3 units in 2 years and we have NEVER had a late payment, and we love blessing our tenants and making them Happy!
works for us!
He's following the rules, albeit with extra payment :) Personally I would let it rise till renewal. Than I would increase late fee till 10%.
Yes, I have tenants who do the same.(long term 3+yrs) I charge 10% late charge. I learned early on not to waive l/c hoping it would alleviate late payments, NOT. It's a priority thing and most don't mind paying the l/c..
I have the same issue with an inherited tenant, but I always make sure to notify them as soon as they are late and follow-up daily. In the end they always pay, including the late fee. Personally, I'd rather an on time payment rather than getting the fee, and doubt I will offer a renewal when their Lease ends.
Just remember to document, document, document as one of these times we may not get the rent and have to move down the eviction road.
Some have said to increase your late fee at renewal. Make sure to check first what your local landlord laws are on late fees. Here in Maryland, the maximum late fee we can charge is 5%.
We had a tenant like that, although he didn't pay late fees. I know it's annoying, but as long as yours is paying late fees I'd probably let it go, but not renew the lease at the end of the term if it really bothers you. Otherwise, extra income!!
I have a tenant that hasn't paid on time yet in the 6 months she's been with me. She has always paid the late fee and communicated with me. While I am still a small timer and actually have a decent feel for how my tenants are....as opposed to when my portfolio quadruples....I am fine to let it go provided it is all paid no later than the 15th. At that point, i post notice and get serious. All my other tenants pay on time.
I recognize that as my portfolio grows and i start managing rentals for others, I will have to adopt a more rigid policy and enforce it consistently else possibly be viewed as discriminatory in how I apply my policies. I will grow into that rigid, corporate policy over time. For now....since it is my money that is late and not an investors....I don't mind cutting my tenants some slack with late payments in return for the fees. The thing that kills me is that she does not mind paying $20 on the 5th and $5/day afterwards. That is expensive in my opinion. Oh well....more revenue for me so far.
As long as you have a security deposit from them and they do not get behind by more than that month, I would say you are covered. As other's have mentioned it may be a preference of the tenant with how other bills or things line up for them. I would look at it as extra income. However if it goes late into the month or the 2nd month, I would be concerned.
I think this falls under "tenant training" and under personal preference. If you don't mind the extra income in exchange for the extra hassle, then don't worry about it. For our tenants, we've communicated up front that we rent to people who pay rent on time. We will absolutely post a pay or quit notice as soon as legally allowed & will follow thru on eviction proceedings until paid in full, each & every time they are late. Haven't really had much problem in this area because we value on time payments and we "train" them to it early on in the relationship. Just depends on your preference. :)
Join the Largest Real Estate Investing Community
Basic membership is free, forever.