Should I renew a habitually late tenant that pays the late fee?
I currently manage 8 rental properties in Grand Rapids, MI and all of my tenants habitually pay on time except one. I've had her as a tenant for 9 months now and she has only paid on time twice. Her credit wasn't terrible nor awesome, but it was all due to medical bills and student loans that she makes regular, monthly payments toward with something like 97-98% on-time payment history. Her lease end is coming up and I have to decide whether to offer her a renewal or not (I'm pretty confident she'll stay if I do).
My issue is this: I send a notice end of day on the 4th if rent hasn't been received. I have never made an exception on this for her ever so it's not like I allowed bad habits to form. She typically receives this notice on the 6th and the weird thing is, she pays the rent along with the late fee that very same day. Usually within an hour of mail delivery time at that house. Once I have reached the point of sending a Pay or Quit and she paid the same day and thanked me for the reminder, haha! She deposits rent to our bank directly, but I have offered her free ACH payment options and Pay Near Me. I've also offered to align her rent payments with her paycheck schedule, but she always politely declines. I don't want to send a reminder before rent is due, because that's the same amount of time for me as sending a late fee notice (only an hour or so in total, but still), but with no late fee to compensate the time. Also, I don't do that for any other tenant so it would feel preferential.
Would you offer her a renewal? Should I offer a renewal, but just up the late fee? ( 4.25% of rent currently) I like to charge late fees that tenants can actually afford so that I actually receive them when necessary.