Realtor · Minoa, NY · Member since 2015 · 125 posts · 56 votes
I'll start by saying: I know I'm too soft on the tenants.
We have a late fee in our lease of $25 for rents that run 1100-1200 per month but it's a one-time fee no matter how late they are. I also have a bad habit of forgiving the fee if the tenant is proactive about telling me why they're going to be late. I know all about training tenants and may have to do what Brandon was talking about on the podcast this week and hire someone to be the mean guy for me. That said:
How do you all set up your late fees? Is it one time or daily and compounding? How much grace time do you give? Do you grace by postmark or arrival date?
It's time for us to get better at this since we're starting to be taken advantage of.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
9y
@Brian Barfoot A $25 late rent fee is not going to make anyone think twice about paying rent late. We ad a 10% late charge if the rent is not received by the 10th of the month which in CT is when rent is considered "late"
Urbana, IL · Member since 2012 · 1k+ posts · 425 votes
9y
@Lee Smith I'm highly intrigued by your policy of zero tolerance and the fees that mount up. I'll be going over this with my building owners to see if this is something I can start to employ in our unit. I've got at least 1 tenant that pays the $40 late fee after the 1st each month no questions asked and I've got another that is taking all he can get.
Property Manager / Investor · San Jose, CA · Member since 2013 · 779 posts · 301 votes
9y
Rent is due on or before the first. There is no grace period. The owner has lots of bills to pay too.
Late fee is $75.00. If a check bounces, rent is now late plus a $25 NSF fee. If multiple bounced checks, all future payments may be required to be money orders or cashiers checks.
I typically spend 45-60mins going over the lease in detail highlighting things like this. I've had almost no issues getting rent on time. Tenants when occasionally late include the late fee without my prompting. They expect it and do not complain.
All that said, there can always be extenuating circumstances but that is the exception not the norm.
In return, my part as a property manager, I provide good communication, take care of issues in a timely manner, provide safe clean housing, etc.
Investor · Evansville, IN · Member since 2016 · 6 posts · 0 votes
9y
I'm in SW IN and rent is due on the 1st, late on the 5th. Late charges start on the 6th at $5 each day. I like that it compounds, in hopes of them being motivated to get it in ASAP. After reading all the replies, I need to double check the laws on what is legal. It sounds like I could be getting a little more out of late fees!
Investor · Glen Carbon, IL · Member since 2013 · 40 posts · 18 votes
9y
In my lease, @1,200/month home, rent is due on 1st, late if received after 5 pm on the 5th. Late fee is $60, then $5/day. If not received by 10th, they get pay or quit notice (following rules for my state & county). If not paid by 15th, eviction process starts. I make it clear in the lease that there are no exceptions, and there are not. I have only charged a late fee one time in 1-1/2 years, but did not waiver. You should not care what their excuse is, nor should you change your policy because they let you know it would be late, and gave a good story.
Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
9y
I offer 2-3 day grace the first time if the first time is months into the lease. I do a one-time fee and don't compound it. I file papers if it's much longer than that.
One idea Brandon stated that I like is to not let the tenant know you're the owner. Make it seem like you're the PM even if you are, in fact, the owner. That way, if they're late on rent, tell them sorry, the owner is a stickler and I can't waive the fee! Also, you can tell them you run rent payments using a computer program and once rents are late the late fee can't be reversed. I have used that line once (my most recent late payment) three or so months ago and the tenant has been paying on time since that fee.
Don't let being a nice person cause you to be taken advantage of. Things happen and you can forgive if you feel the need but most of the time, enforce the rules and the tenant will pay on time since they would much rather not hand over late fees.