I don't have a late fee. I offer a $100 discount if rent payment is POSTMARKED by the 5th. This gives the tenant the incentive to pay early and save some money. With me, it is not about the money but having to do as little as possible to get funds. Pay early...save. Pay late..pay more. Their decision.
You need to take the time to sit down and learn the law. As a landlord it is your responsibility to learn your state landlord tenant regulations before you purchase a rental property. Tenants deserve more than to have a by the seat of the pants learn the law as your go landlord.
You own a business, learn your responsibilities before a tenant takes you to court.
I don't have a late fee. I offer a $100 discount if rent payment is POSTMARKED by the 5th. This gives the tenant the incentive to pay early and save some money. With me, it is not about the money but having to do as little as possible to get funds. Pay early...save. Pay late..pay more. Their decision.
I have a $50 flat fee. I am considering upping it to $100 or 10% of rent. A flat fee is easier to hand then per day fee.
Yes, the flat fee is MUCH preferable. The $100 or 10% is common, but I like the fixed dollars - - it's expensive enough to be painful and to encourage prompt payments.
BTW: TRAIN your tenant by issuing a courtesy notice ONLY ONCE; "Your rent was late this month and if it is late again, I will apply the late fee of $xxx."
BTW: TRAIN your tenant by issuing a courtesy notice ONLY ONCE; "Your rent was late this month and if it is late again, I will apply the late fee of $xxx."
Yes we give that courtesy notice only once. WHEN THEY SIGN THE LEASE!!!! After that if they are late, they are late. My lender doesnt give me a courtesy notice.
We always try to make it fair so that we are not putting them in a bad financial position that they cannot get out of. Because what many landlords don't realize is that they have to always charge whatever the late fee is in the contract otherwise the landlord is actually the one that is breaching the contract and possibly voiding it first by not living up to their end of a signed agreement
We always try to make it fair so that we are not putting them in a bad financial position that they cannot get out of. Because what many landlords don't realize is that they have to always charge whatever the late fee is in the contract otherwise the landlord is actually the one that is breaching the contract and possibly voiding it first by not living up to their end of a signed agreement
Not entirely correct - - because there is a fee doesn't mean you have to apply it. However, if you continue to waive the fee, you do set a prescience that can later make it impossible to enforce it.
True @Jeff B. but I would say that this can be a very slippery slope and if you charge some of your tenants and not others you could be construed of being discriminatory towards certain people which goes into a fair housing issue. Not that it is true but it is how you are alleged to be true to what your intent was.. Again just not a good business practice to get into in my opinion
True @Jeff B. but I would say that this can be a very slippery slope and if you charge some of your tenants and not others you could be construed of being discriminatory towards certain people which goes into a fair housing issue. Not that it is true but it is how you are alleged to be true to what your intent was.. Again just not a good business practice to get into in my opinion
Sending a courtesy notice is ALWAYS good business.
Late Fee... A fee that is paid by a tenant for the privilege of paying their rent when they choose.
Charging a late fee is simply telling the tenant it is OK to pay late. This is the primary reason so many landlords have tenants that consistently pay late. Tenants view the late fee as a signal from their landlord that it is OK to pay when they choose.
The only way to prevent consistent late payment is to terminate the lease.
In KS - I charge $30.00 if I don't have it by 5pm on the 5th and then $3.00 a day after that. I just gave a tenant a 30 day notice to move out because they are late every month.
Late Fee... A fee that is paid by a tenant for the privilege of paying their rent when they choose.
Charging a late fee is simply telling the tenant it is OK to pay late. This is the primary reason so many landlords have tenants that consistently pay late. Tenants view the late fee as a signal from their landlord that it is OK to pay when they choose.
The only way to prevent consistent late payment is to terminate the lease.
I am 100% OK with them paying a late fee. I file for eviction on the 16th. If everyone pays on the 15th, I get an extra 5%. I am cool with that.
I charge $5/day starting the day after it is due from the tenant's lease. This can be quite a challenge to keep up with over time. I have some that pay weekly (sleeping rooms) and the daily late fees for these seem to be a headache at times. I like the idea of a flat fee or % of the rent. For the weekly rentals, I would likely make it a lower value for the flat fee, but probably need to make it significant enough to make it be painful or it does not make a difference for them. As mentioned already, it does provide some extra income at time due to late fees.
Another struggle that I have had with the daily late fee is that it seems to be more difficult to calculate over time when I file for eviction - especially on the weekly rentals. I present the numbers at the eviction hearing and have never had anyone question them, but always wonder if all the numbers are correct in the final tally.
Have an investor friend who charges $5/day for up to 10 days. I personally, don't charge anything to my renters, but I don't have a huge problem with late rents. If they let me know ahead of time, I can work with them.
Instead of charging a late fee we offer a prompt payment discount for rent that is postmarked by the due date. If you want to use this method you simply inflate your rent by whatever amount you feel is fair at the beginning of the lease.
You definitely need to check your local laws. Some local laws are different than state laws.
If tenants complain about the late fee I generally explain to them that I can't make my mortgage payments in a timely manner without the rent and that my bank charges me a late fee for late mortgage payments.
Also make sure you check your local laws to make sure it's legal to take the late fee out of the security deposit. There was a time when that was not legal in Madison Wisconsin. You had to go to court to collect the late fee. That made it very inconvenient to enforce.
The courts in Ohio have been mixed on upholding late fees particularly when charged daily. I charge a flat $40 late fee in my low rent properties. If a tenant notifies me on or before the first that they will pay on or before the 6th, I discount the late fee 50%. I quit or pay on the seventh day of the month. For tenants that cannot pay in full by the sixth, I will allow them to make partial payment as long as they pay enough to stay current. If they make arrangements in advance and then do what they say I discount the late fee 50% ($20)
6% for us. Rent is due on the first, we charge the late fee after the 3rd. Some of our tenants are fine paying the late fee occasionally because it gives them flexibility. I had one tenant who was late almost every month.
In California, if I evict for nonpayment of rent, I cannot include late fees in the amount of unpaid rent.
We give them a one time waiver of the late fee, which is usually because they didn't mail it early enough and they are paying via mail. They learn pretty quickly.