The Dalles, OR · Member since 2017 · 12 posts · 15 votes
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!
I tried this for the first time on one of our properties recently, I increased the rent $50 over what I wanted and prominently advertised the discount of $50 to pay before the 1st and yes there is a late fee if it’s late. So far (6 months) rent has been paid before the 1st each month.
Real Estate Agent · Oklahoma City, OK · Member since 2019 · 956 posts · 600 votes
6y
@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.
Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
6y
@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’. ;)