Discount rent for on time payments.

[Mark Lira]

Hello

We all like to receive rent on time. With that in mind, I had a thought of advertising rent slightly higher than I need and offering a discount for payments made on the day I want it. For example if I need $860/month due 1st of the month, I then advertise for $870/month with a $10 on time discount for payments made on the 1st.

Department stores use a similar strategy where they mark up an item, then have a "sale" on it at regular price. It seems logical but a bit unethical at the same time.

Is this a good idea and something people commonly use in real estate? Or deceptive and unethical?

Any advice, thoughts or opinions would be fantastic. Thanks!

[Matt K.]

Originally posted by @Jaron Walling:

I paid my mortgage on time last month. Where's my DISCOUNT?! I guess it's time to switch lenders. 

 There's plenty of lenders that give a discounted rate for automatic payments....

[Kiera Underwood]

@Mark Lira I just view it as another thing to manage. Alternatively, I'd offer a discounted rate to a great tenant at lease renewal. If someone has been great all year, $10-$20 off per month instead of an expected increase could really gain some loyalty and save you vs a month of vacancy. 

[Patti Robertson]

@John Pierce - In Virginia you can actually charge any late fee you and the tenant agree on.  If you charge different than 10% a Judge will ask to see your contract, but as long as the tenant agreed to it, you almost always get it.  And most times the late fee is paid outside of any court dealings, so the very few times a judge may override the contract and back it down doesn’t cause reason for you to limit your late fee in your lease.  Just sayin’.  ;)