Short on Rent Payment
Investor · Shreveport, LA · Member since 2017 · 10 posts · 3 votes
Hi everyone, currently own a 3-plex unit in Shreveport, La -- I am self-managing the property (my first one). My tenant is late on a payment and currently owes $700 rent + late fees for a total of $775. Today is the final day to pay before I file an eviction. The tenant contacted me and said she only has $600 to pay rent this month.
Do I accept the $600 and carry the $175 balance into next month's rent? Has anyone had experience dealing with this? I do have a $700 deposit held on their account.
Any advice would be much appreciated...thank you in advance.
If she could pay by money order or cashiers check, personally I'd take the money, carry over the balance and I'd make sure any late fee are within your state landlord tenant law regulations, you can google your state landlord tenant laws to make sure on that.
If she's been a pretty regular payer then work with her.. let her catch up
If she could pay by money order or cashiers check, personally I'd take the money, carry over the balance and I'd make sure any late fee are within your state landlord tenant law regulations, you can google your state landlord tenant laws to make sure on that.
If she's been a pretty regular payer then work with her.. let her catch up
If she could pay by money order or cashiers check, personally I'd take the money, carry over the balance and I'd make sure any late fee are within your state landlord tenant law regulations, you can google your state landlord tenant laws to make sure on that.
If she's been a pretty regular payer then work with her.. let her catch up
I completely agree with Deanna. It is less costly to try and work it out with the tenant sometimes than it is to look for a new one. Try to come up with a payment arrangement for the rest of the rent with the tenant and make sure that it is not something that is going to keep happening.
I disagree! If you accept the funds in a differant manner than your lease states, your lease becomes null and void, and your new way of accepting payments becomes known as common practice.
A tenant who is unable to make payments this month is not likely to be able to make a larger payment next month. Stick to your lease agreement and dont bend. That is what the lease if for. If they cant make a payment, and have to terminate early, your security deposit should cover your vacancy period and give you time to find a new tenant who pays on time. If you make an exeption this time, they will expect it again on down the road.
Hi everyone, currently own a 3-plex unit in Shreveport, La -- I am self-managing the property (my first one). My tenant is late on a payment and currently owes $700 rent + late fees for a total of $775. Today is the final day to pay before I file an eviction. The tenant contacted me and said she only has $600 to pay rent this month.
Do I accept the $600 and carry the $175 balance into next month's rent? Has anyone had experience dealing with this? I do have a $700 deposit held on their account.
Any advice would be much appreciated...thank you in advance.
Carry forward if you trust her enough to pay you in a few days. Evictions cost you a lot more plus and at the very end there is vacancy to fill, which will cost you even more.
Some people might call me names, but I have a rule. As long as the tenant pays within the month, I will not evict them. Only time I evict is if they are causing nuisance to the neighbors or have destroyed property. And in two cases I have evicted people.
You can set your own rules and do what works for you best.
I second @Ramsey Blankenship's post. Although I have read about landlords here on BP that accept the partial rent and begin the eviction process anyway.
Once you start taking partial payments , the tenant will keep doing it
Great feedback from everyone...I ended up going the route that Matthew made note of (and my mentor suggested as well). Stick the rules of the lease -- if the tenant can't afford the extra $175 this month, he/she is most likely not going to afford it next month.
Again, thank you all for the prompt feedback.
Once you start taking partial payments , the tenant will keep doing it
Yes, and as long as late fees are paid, I would make $600 every year @ $50 per month. Those behind-the-home-plate tickets at Nats Park are very pricey, and my tenants seem to have no problem funding my very expensive hobby.
Bottom line.. Personally for me there is not difference between full payment on 1st of Month vs Full Payment + $50 by say 15th. Actually, I prefer latter.
Once you start taking partial payments , the tenant will keep doing it
Yes, and as long as late fees are paid, I would make $600 every year @ $50 per month. Those behind-the-home-plate tickets at Nats Park are very pricey, and my tenants seem to have no problem funding my very expensive hobby.
Bottom line.. Personally for me there is not difference between full payment on 1st of Month vs Full Payment + $50 by say 15th. Actually, I prefer latter.
Being a Yankees fan is even more expensive :)
Leases don't pay rent. Tenants do.
Your first property eh. After you have been through an eviction you will learn.
Once you start taking partial payments , the tenant will keep doing it
Yes, and as long as late fees are paid, I would make $600 every year @ $50 per month. Those behind-the-home-plate tickets at Nats Park are very pricey, and my tenants seem to have no problem funding my very expensive hobby.
Bottom line.. Personally for me there is not difference between full payment on 1st of Month vs Full Payment + $50 by say 15th. Actually, I prefer latter.
Being a Yankees fan is even more expensive :)
Yeah when you have 27+ rings to show off.... lol
What you should do is dependant on your tenants past history not on the individual situation. To begin if it is her first late did she contact you before the 1st and explain her situation. When she did not pay on the 1st did you issue a 3 day notice or did you have a serious one on one as to what you expected of her.
How you deal with late and partial payments depends entirely on if they have ever done it before and how they handle it when it does happen.
If they do not let you know in advance you issue a 3 day on the 2nd. If they do not meet a agreed to dead line to pay in full you issue a eviction to protect yourself (you can always withdraw it when they pay). If they are late a second time you either immediately serve notice or do not renew their M2M or at the end of their term lease. This is not a business where you should have to deal with irresponsible tenant's. Good tenants out number bad ones 9 to 1. Go find a good tenant and operate your business as it should be run. Let the lazy landlords rent to the bad tenants
If the operation of your business does not depend on monthly income why care let her, heck let all your tenants, pay what ever and when ever they choose. It boils down to whether you choose to be a professional landlord or a hobby mom and pop landlord.
I believe your mentor would have a opinion on that topic.
@Thomas S. - some great points in that post.
Just a disclaimer -- this was an inherited tenant from January 2017 when we purchased the property.
Here is the process I took and the conclusion:
I issued a 'late rent' notice after the 5th of the month (as per the lease agreement) -- when the rent was not paid by the 10th, I issued a 'Final Notice' explaining that rent + late fees are due on or before the 13th or an eviction will be filed. The tenant did contact me to explain she only had $600 of the $775 owed and would not be able to cover the remaining amount. I then posted my question to BP for feedback from the BP community. After reading the feedback and speaking to my mentor I decided to stick with the terms of the lease and be a 'professional landlord' -- I met with the tenant on the 12th and gave the following 2 options:
1) Pay the total rent + late fees by the 13th
OR
2) Pay 1/2 month's rent of $350 (no late fees) and be out by the 15th. I would not file and eviction but she would not receive her deposit back because she broke the lease agreement.
The conclusion...the tenant came up with the additional $175 and paid me in full this morning.
We shall see what next month brings....
Thank you all for the feedback.
I have a tenant who was late once and asked to pay partial payments. For the last 11 years, he pays partial on the 1st and partial on the 15th. IT just works out best for him and works fine for me too. If I hadn't worked with him, I would have lost a tenant that has ended up staying 11 years and still going.
It's already halfway thru the month, and he's willing to pay most of the rent now. Take it. Be very clear that you can't have him go delinquent but if its easier to pay semi-monthly (staying ahead) you can accept that. Once he doesn't pay and gets behind, then you have no choice but to ask him to go.
There is a difference between late rent and partial payment. Never accept partial payments. If the due date is on the 1st, and you have not received the rent by the 5th (allows for mail delivery) file an eviction notice. It usually only takes once and then you will find out if they are good tenants or not. I also do not list a grace period in the lease agreement. As you as you do, the tenant will treat that as the due date. However, we allow 5 days for the postal system to deliver the mail. This is a key point if you need to go to court to file an eviction. It demonstrates good faith on your part. The rules are laid out in the lease agreement for everyone's benefit. As soon as you don't play by those rules you just opened Pandora's Box and created difficulties for yourself if you needed to go to court for an eviction.
I own a property management firm. So, I'm saying this out of love. Remove yourself from the no-rent, late-rent, spouse-lost-his-job, dog-died, etc. scenarios. Hire either a bookkeeper or a manager or some buffer. I give you permission to treat your rental like a real business, and your children, church, nieces, nephews, etc. whatever, are the shareholders (eventually). You are not doing any favors to your generational wealth-building by even knowing when or why a tenant is late.
What we do is pull out of the lease the exact language that discusses two important points that most tenants do not really understand, and we make them sign, again, on this addendum, that they are specifically aware of these two important points:
Those two aspects are on a separate sheet of paper. If the case ever gets to judge, the position of the property owner is that much more powerful. Also, it gives the property owner more confidence to hire an attorney and go after the tenant 100%. Why not? They will get it all back eventually, unless the tenant moves to another country or goes to live off the grid.
So, that's actually how we talk about the application process internally. We role play it. "Do we need a co-signer? Is this potential tenant capable of disappearing off the grid? Did we call their employer? Is this an employer from whom we can garnish wages, or are they just writing in babysitting income as their job?"
Your rental property is a business. If you make every decision with at least some reference to a possible worst case lawsuit-type scenario, then you will be making better decisions.
The worst case scenario is the tenant sitting in your house until they are evicted which will happen if you push them into a corner they can't recover from. Then you will wish you had accepted those late and or partial payments.
Above was response to @Tom Kaider
OP - I'm pleased it worked out for you.
@Ihe O., I agree that tenants pay rent, not leases - however the entire reason for this thread was to discuss tenants who arw not paying rent, therefore making your statement null and void.
Consistantly accepting late or partial payments is not scalable. Try keeping up with partial payments from 100 tenants. The landlord has expenses due to the bank in which he/she likely utilizes rents to cover.
I personally would rather never be paid extra for late payments. I would much rather everyone pay on time and operations run smoothly.
@Ramsey Blankenship Did the OP not say he is self-managing his first property?
So your statement - which is pertinent to those that have 100 tenants - is null and void.
@Ihe O., touche. Sounds like the OP handled the situation and the tenants found the money somehow. Its amazing how tenants find the means to pay rent when they realize they are dealing with a landlord, not a friend. Everyone has their own style of managing and the only ones who are wrong are those who are slumlords.
I personally plan to scale my RE business, however if that is not OPs goal, that is fine as well.
@Ramsey Blankenship Respect bro.
I own a property management firm. So, I'm saying this out of love. Remove yourself from the no-rent, late-rent, spouse-lost-his-job, dog-died, etc. scenarios. Hire either a bookkeeper or a manager or some buffer. I give you permission to treat your rental like a real business, and your children, church, nieces, nephews, etc. whatever, are the shareholders (eventually). You are not doing any favors to your generational wealth-building by even knowing when or why a tenant is late.
What we do is pull out of the lease the exact language that discusses two important points that most tenants do not really understand, and we make them sign, again, on this addendum, that they are specifically aware of these two important points:
Those two aspects are on a separate sheet of paper. If the case ever gets to judge, the position of the property owner is that much more powerful. Also, it gives the property owner more confidence to hire an attorney and go after the tenant 100%. Why not? They will get it all back eventually, unless the tenant moves to another country or goes to live off the grid.
So, that's actually how we talk about the application process internally. We role play it. "Do we need a co-signer? Is this potential tenant capable of disappearing off the grid? Did we call their employer? Is this an employer from whom we can garnish wages, or are they just writing in babysitting income as their job?"
Your rental property is a business. If you make every decision with at least some reference to a possible worst case lawsuit-type scenario, then you will be making better decisions.
We have a lease addendum like yours about entry and asked for a reasonable accommodation request to being present due to mental health disabilities. We are both disabled and the wife has PTSD and this landlord has boundaries issues and is very possessive of the property. What would your take be. Hudvash Social Worker is advocating for this accommodation if that helps us at all.