87 Replies

People that "dance all the way to the bank" may end up slinking back to the bank for a withdrawal when their tenant fails to pay the last month's rent, abandons the unit, or trashes the unit.

It's bad practice. You may get lucky and have a lazy tenant that pays late every month but always pays and always pays the late fee. The more likely scenario is that they will eventually cost you more than what you gained with late fees. Of course, I only have 11 years of experience with hundreds of rentals so maybe these guys know something I don't.

If you let them pay late, you are training them to ignore any other rules you establish. Get them on track or get rid of them before you come to regret it.

I would suggest speaking to the tenant about it. Let them know very nicely that they like them as a tenant, but rent needs paid on time. Try and put them on a plan to catch up. 

Also, when the lease is over if you decide to keep them raise the rent, but give a discount if paid on time. This should be a motivator. 

Good Luck! 

Half of my tenants are about a week late. And I don’t charge late fees most of the time. They all have excuses and live their lives pay check to paycheck. Almost all are lifers as far as renting. As long as I get paid by the 15th then I’m ok. I’m not living pay check to pay check so I can survive. None want to leave because they know they might not find landlords elsewhere as flexible. If they are a month late, then I evict. But I’ve only had to do that one time so far. So I’m ok with rent coming in at random times every month. No big deal.

@Charles Ngansop . Depends on how past dues as I have one tenant that is days late but is fine paying me the late fee. I think it depends and some on BP will argue serve them the first day they fall out of grace, but I take a different approach if they are a solid tenant all the way around. The key is how late are they and does this cause you stress?

@Charles Ngansop - I don’t know about your luck. I have a hard time getting late fees paid. I’ll first send a text saying I didn’t receive it and reminding them of the late fee. On 2nd, “I didn’t see your direct deposit yet. Please include your $50 + $10/day after today late fee with your payment deposit. My mortgage is due on the fifth. Thanks.” Or whatever. If I don’t get it by 5th I’ll file for eviction. Every time I’ve waited to file I’ve regretted it.

My smart friend Marc Halpern of parttimeinvestors likes to train his tenants to be good tenants. If they have trouble budgeting, He will call them or stop by and agree to change the rent from once a month to every two weeks on their payday. I’m not sure if he charges any fee for this such as they pay him 1/2 month rent every two weeks so he ends up with an extra payment or two at the end of the year. I like his idea because then they pay you out of each paycheck before spending on their other bills. I think the ideal would be an ACH auto withdrawal every two weeks. I assume that most renters are worse at budgeting than homeowners. Excuses are low. There’s a lot of work available for people who need money. I’m constantly surprised by anyone saying they don’t have $$. You can get paid $20-30/hr in most areas for anything from cleaning to tutoring to pet/baby sitting to food delivery. It requires you to choose not to be unproductive with your spare time. (IMO you don’t deserve to Netflix and chill if you haven’t paid rent).

Originally posted by @Terrell Garren :

... keeps your property nice and clean, treats the Landlord with all deserved respect...

Let the late fees roll and love life.

 Agree, 100%, as long as they pay within the month. I had a single family house that I was renting to a professional couple. They were late four or five times per year, but always paid the $100 late fee. That's just money in my pocket. If they mistreated my property, or had a serious lapse in payment (several months), things would be different. 

That’s a difficult situation. I know someone who owned a house but lost it so they had to start renting. So they still had an owners mentality with pride of ownership. They treated their rental as if it was their own. Never called the landlord for issues. Built a shed in the back yard. Fix the AC unit several time by paying repairman. Built a screened in front porch. He was all in all acting like it was his home. The issue was he was late most months. Not by weeks but by days. He would pay his late fee and continue to go about his life. He lived in that house for 20 years. After he moved the owner sold the house and walked away having an easy 20 years of rental payment with having to do nothing but cash the check. The owner did replace the roof and update the windows. Windows were at material cost because the renter and family installed them. That tenant served to be what I think is a great tenant and the owner gave him some lenience due to years of him being there. Might I also add it was a month to month lease. 

Yes something like this isn’t common but it’s out there. You have to gauge your tenant. Depending on Their pride of ownership and how long you think they may stay. I can’t speak for them whether they will trash the place or not or just skip out on last month rent. Your the only one that can decide that. Everyone else situation is different. Some say run with it others say get rid of them but they base it off of their personal experiences. Base this off of your experience with them. Judge their character and make your decision that way. They might just be the unicorn who pays late takes care of the place and will stay for years to come, you never know!!

I had the same issue before I switched to an online payment platform which automatically applies a late fee after 5 days. Not sure what the laws are in your neck of the woods but I am in New York and my late fee aligns with state law.

I like that the online platform automatically applies the late fee because it makes it a little less personal than a text or verbal exchange.

@Charles Ngansop

Always stick to the terms of the lease. If he wants to pay late fees - great! The return on your modest investment for a few days is going to show a good profit.

He’s no greater risk of trashing the place than someone that pays on time.

I base that on my many years of being a landlord.

Nathan,thanks for the feedback. Tenant has received numerous warnings on paying late, but at some point, landlord do not want to be  alarming and cause tenant to leave.

John, you must be the only NICE landlord out there. Hahaha! But seriously, you made a very good point.Most folks live paycheck to pay check especially in a low income neighborhood where having a good tenant can be  very difficult.

Thanks John for the input

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