NICE TENANT BUT ALWAYS LATE OR BEHIND RENT PAYMENT

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NICE TENANT BUT ALWAYS LATE OR BEHIND RENT PAYMENT

Charles Ngansop
Involved In Real Estate · Rockville, MD · Member since 2012 · 40 posts · 18 votes

How would you handle a type of Tenant that keeps your property nice and clean, treats the Landlord with all deserved respect, but is always behind on Rent?

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Terrell Garren
Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
6y

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

Let the late fees roll and love life.

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  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    6y

    @Charles Ngansop I would say that being two weeks behind on an ongoing basis is too much. I have tenants who will pay a day or two late with late fee. That is tolerable and generates a little extra income to offset the headache.

    I would work with the tenant on a new payment plan. I would set the new schedule to line up with their pay days. If they get paid every two weeks, then take half rent on each pay day. The magic of this payment system is that biweekly payroll happens 26 times a year. That means over that means course of a year, you will collect the equivalent of 13 months rent. The more important thing about taking payment on their payday is that you can get the money before they have a chance to spend it on something else.

    One other factor to consider is the rentability and fair market rate of the unit. If you feel you are getting higher than market rent or that the property will be difficult to rent to a better qualified tenant, then working with the existing tenant may make more sense.

    2Reply
  • Constancia R.
    IN · Member since 2017 · 96 posts · 63 votes
    6y

    @Charles Ngansop, I would thank God and collect late fees, based upon "keeps property nice and clean." IMO, this is the BEST kind of tenant . . . and they're nice, too?!?! WHAT A DEAL!!!

    If you get rid of this one, your next tenant could be a nasty slob who doesn't take care of the property and is a disrespectful, foul-mouthed cad OR WORSE!!!

    I'll take the clean, extra-money paying sweetie for $500, Alex.

    P.S. You could always switch the due date! I did this with one of our tenants and they have been fine since then, only being late once or twice a year as opposed to consistently late. It worked out better with his pay date.

    3Reply
  • Charles Ngansop
    OP
    Involved In Real Estate · Rockville, MD · Member since 2012 · 40 posts · 18 votes
    6y

    Excellent point of view, JoeI will implement those recommandations.

    Also than you Constancia.Very good points

    0Reply
  • Brian Ploszay
    Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
    6y

    Another question for everyone is when do you pull the plug and start the eviction process on someone.  I theoretically do this on the 61st day of missed rent.  Basically two months.   I deliver the notices (5 day) prior to that. 

    I am not super concerned about 30 days, which is offset by a late fee.  Some on this post love the late fees, but there is an administrative cost for late tenants.  We have to create tasks for our staff and contact the late payers.

    1Reply
  • Brian BoydPro Member
    USA · Member since 2019 · 305 posts · 536 votes
    6y

    The cost benefit for replacing the tenant vs. collecting late fees seems like the scales tip to collecting late fees.

    1Reply
  • Charles Ngansop
    OP
    Involved In Real Estate · Rockville, MD · Member since 2012 · 40 posts · 18 votes
    6y

    Thanks, Brian.

    But it's too technical to understand.Can you break it down a little bit? Hahaha!

    0Reply
  • Heather Mills
    Amherst, OH · Member since 2016 · 12 posts · 3 votes
    6y

    @Charles Ngansop

    You could discuss with her that you really need to get the rent back on track for the first of the month, discuss setting a date (like income tax return time) to get everything financially squared away and that after that point you will have to start enforcing the late fees if she falls behind again. That way she has a way to get back on track but realizes that she needs to maintain this priority rather than blowing her money and getting in the same situation again.

    0Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    6y

    @Charles Ngansop

    Honestly, the same way he/she treats me and my property. 

    Now, I didn't get the context of "Late" is it a few days every month or is 30 days late. 

    I think one way is to ask the tenant(s) for the reason behind their constant late rent payment issues and you may be to come up with a solution such as moving the payment date from the 1st to another day or reduce the frequency from monthly to bi-weekly or something... 

    Interesting issues as a Landlord, eh! 

    0Reply
  • Joseph Walsh
    Brookfield, WI · Member since 2016 · 191 posts · 108 votes
    6y

    I had this problem.  Then I figured out I was the issue, not the tenant.  I hired a property manager because I don't have the personality for it.  They had him paying up rent on time, and within 3 months he had paid a bunch of back money due for the water bill (which is now just part of the rent).  It was a matter of late notices and fees at 5 days, and at 10 days, eviction notices.  he promptly paid up both times he got the 10 day notices.  Now he pays a couple day's early each month.  They also changed the payment date to align with is Pay checks (or in this case SS checks).  They pointed out to him, you can live without a car, cable, or phone, even electricity and heat for a few days, but not without a roof, rent first.  He didn't leave, and is still a great tenant (hard on the house though), and now has been "retrained"

    2Reply
  • Les Dell
    Flipper/Rehabber · Springfiel, MO · Member since 2018 · 5 posts · 4 votes
    6y

    I rented a house in Atlanta for 12 yrs. One evening someone knocked at the door and it was my landlord. This was a big surprise. He told me that he hadn't received the rent check. I can't remember how late it was but pretty darn late. I was almost sure that I had mailed it but if he had driven over there after dark then I knew he hadn't gotten it. I told him I would check on it for him and sure enough it was sitting in the kitchen in a stamped envelope underneath some junk mail! 

    I think I was in Europe one time and didn't get the rent check to him by the 1st. The point is the occasional late rent payment doesn't make the tenant bad. What's his track record? I find it hard to believe some of the people on this forum urging late fees or eviction have never been late on bill before for whatever reason. It happens. It's usually unintentional. My landlord never charged me a late fee and told me I was the best tenant he'd every had and hated to see me leave. I left the place better than I found it. Why not? It's where I lived and I treated it that way. 

    2Reply
  • Adam Mraz
    Property Manager · Atlanta, GA · Member since 2018 · 22 posts · 9 votes
    6y

    We train the tenants by following a date-driven process.  This helps us scale (having to keep track of separate ways to treat tenants isn't going to happen).  Rent is due on the first, late notice and $50 late fee on the 6th, $10/day after the 6th, 3 day notice to pay on the 7th, file on the 10th.  If they need to pay after that, we do a consent agreement through the court to lower the amount of time (and court cost) to remove the tenant.  As a property manager, the other thing that it helps us avoid is Fair Housing complaints.  It is documented that everyone is treated the same. Even the best intentions to help someone can be used against you in complaints.

    In summation, having a process improves scalability, lowers liability, and allows for customer service b/c the tenants know exactly what to expect.

    1Reply
  • Karen F.
    Investor · San Diego, CA · Member since 2015 · 435 posts · 421 votes
    6y

    Very nicely, inform him that the late fee is due.  And if the rent isn't paid by the late date, very nicely inform him that a notice to quit will be served, so he'll need to add the marshall's service fee.  And if it still isn't paid, very nicely file the eviction lawsuit, adding more to his costs.  And if it still isn't paid, very nicely evict.

    My point is, do it all very nicely.  And at arm's length.  A text notifying that rent is late, that they now owe rent and late fee, must be paid in full in cash or with certified or bank check by such and such a day, or notice to quit will be served, adding on cost of marshall's fee to his account.  But you do it all very nicely, sympathetically, etc.

    Do not let a tenant get behind on the rent.  You will wind up losing a lot at the eviction, as opposed to a little.

    1Reply
  • Patrick Sears
    Midlothian, VA · Member since 2013 · 130 posts · 17 votes
    6y

    IF they always (AND I MEAN ALWAYS) get caught up INCLUDING YOUR LATE FEES (you do collect late fees, right?) within 3 weeks of the due date, then I say keep them going.  Nothing like repeated late fees to bump up your yield (just ask Bank of America).  Some people are just habitually "10 minutes late to work" (like me...)

    HOWEVER, if this is a situation where they are paying later and later, or going past 30 days into the next pay cycle, THEN GIVE THEM one more chance-IF THEY FAIL AGAIN-DUMP THEM!!  THIS IS A LANDLORD'S MARKET NOW

    0Reply
  • Joseph Walsh
    Brookfield, WI · Member since 2016 · 191 posts · 108 votes
    6y
    Originally posted by @Les Dell:

    I rented a house in Atlanta for 12 yrs. One evening someone knocked at the door and it was my landlord. This was a big surprise. He told me that he hadn't received the rent check. I can't remember how late it was but pretty darn late. I was almost sure that I had mailed it but if he had driven over there after dark then I knew he hadn't gotten it. I told him I would check on it for him and sure enough it was sitting in the kitchen in a stamped envelope underneath some junk mail! 

    I think I was in Europe one time and didn't get the rent check to him by the 1st. The point is the occasional late rent payment doesn't make the tenant bad. What's his track record? I find it hard to believe some of the people on this forum urging late fees or eviction have never been late on bill before for whatever reason. It happens. It's usually unintentional. My landlord never charged me a late fee and told me I was the best tenant he'd every had and hated to see me leave. I left the place better than I found it. Why not? It's where I lived and I treated it that way. 

    But based on your account, you were not chronically late.  This tenant sounds like they are.  My example not only were they chronically late, but I had already forgiven 3 months worth of rent over the 4 years because of various sob stories, while true, didn't prevent him from having top of the line cable, and a new car.  and I had already assumed I was going to eat the several hundred $ of the water bill he never paid.  So yes, the occasional late payment.  However, I bet had you got the 5 day notice and $25 fee associated with it, you would of realized you forgot to mail the rent, and he wouldn't of had to drive over 3 weeks later.  You likely would of found it, AND called to let him know.   You didn't need training on being a good tenant, because you were one.

    0Reply
  • Erik Hatch
    Rental Property Investor · USA · Member since 2018 · 325 posts · 222 votes
    6y

    @Charles Ngansop how detrimental is this single tenant to your overall income stream? Let the money and fees roll in as said earlier.

    0Reply
  • Gerardo Contreras
    Rental Property Investor · Middletown, NY (middletown ny) · Member since 2019 · 2 posts · 0 votes
    6y

    @Terrell Garren if they paying the rent and they Keep the probably nice and clean keep them those Tenants a hard to fine . Just let them now do you notice the pay late all the time and you waving late fees because they give a good care to your property.

    0Reply
  • Irving Cham
    Developer · Maplewood, NJ · Member since 2019 · 8 posts · 2 votes
    6y

    @Charles Ngansop

    try

    https://www.buildium.com/

    0Reply
  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    6y

    It appears that there's a lot of landlords out there that don't adhere to their contracts. Do you have late fees, additional daily late fees, etc? If that's in your contract, then abide by it. If you're not going to charge late fees then take them out of the contract. Not enforcing the contract leads to expectations regarding other parts of the contract.

    We have a $75 late fee and a $10 fee for every day past that. We require tenants to pay it. (with rare exception)

    Excuses mean very little to us, they always have a ''story". Rent is either paid on time or it isn't. This is pretty simple. Charge late fees, train your tenants, not the other way around.

    0Reply
  • Monique O.
    Rental Property Investor · Visalia, CA · Member since 2019 · 44 posts · 20 votes
    6y

    @Terrell Garren As long as you treat all tenants the same (meaning if others are late, you charge them with late fees as well) We don’t want any discrimination! Lol

    I agree then.. let the late fees roll in!

    0Reply
  • Curtis Mears
    Property Manager · Raleigh, NC · Member since 2014 · 729 posts · 596 votes
    6y

    @Charles Ngansop

    i had a tenant similar to this. always paid, but a few days late. i talked to them and they mentioned they got paid a few days after rent was due. i offered them to prepay 5 days ahead so it changed the due date by 5 days. also, on their last day of the lease, they will pay 5 days less of rent.

    0Reply
  • T Gibson
    Member since 2019 · 2 posts · 0 votes
    6y

    @Charles Ngansop

    Being brand new to all of this and just starting to soak up all the information I can in these posts, podcasts, videos, etc...I’m so far from being an expert or even worthy of responding in this forum… But I figure I’ll jump right in anyway. I was listening to a podcast just yesterday that I found on BP from last year. One of the comments made was relevant to this topic because the speaker was saying that if for no other reason, you charge the late fee because you don’t want to face possible discrimination allegations later. How do you really decide which tenants to charge late fees to? What happens when another tenants say they are the only ones that you’re charging late fees to even though there are other tenants that have been late? I took away from the podcast that you should charge late fees every time as long as the lease agreement reflects that to be the policy.

    Still learning but glad to hear that information that is being shared in the videos and podcasts are issues that are being faced every day.

    ;)

    0Reply
  • Bill Goodland
    Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
    6y

    @Charles Ngansop keep collecting those late fees and don’t renew the lease

    0Reply
  • Shang Shu
    Member since 2019 · 2 posts · 0 votes
    6y

    @Terrell Garren good

    0Reply
  • Constancia R.
    IN · Member since 2017 · 96 posts · 63 votes
    6y

    @Charles Ngansop, I can explain what Brian Boyd meant when he said, "The cost benefit for replacing the tenant vs. collecting late fees seems like the scales tip to collecting late fees."

    If you were to weigh both of these on a scale (replacing the tenant vs. collecting late fees), the better choice would be to collect the fees. How much does it cost to collect late fees? Nothing, since you gain. How much does it cost to replace a tenant? Missed rent for a month/two months/five....PLUS cleanout PLUS possible repairs PLUS possibly having to paint...you get the picture. One gives you money and the other could cost you thousands.

    1Reply
  • Charles Ngansop
    OP
    Involved In Real Estate · Rockville, MD · Member since 2012 · 40 posts · 18 votes
    6y

    @Constancia R..Thumbs up Constancia.
    “ The most complicated skill is to be simple.” Anonymous.

    0Reply
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