I just bought a Triplex and am now about to collect rent for October. Last month the renters in unit 1 were late. I bought the building from my father and he said that they are late every month and usually don't pay tell around the 10th. This doesn't work for me and would like to figure out how to get them to pay on time every month.
I texted the renter 4 days ago and reminded him that rent was due on the first. I woke up this morning to a text saying that 2/3 of them occupying the unit don't get paid tell the 9th and will be making there payment then.
Do I start charging him late fees or let it slide..? Any ideas would be extremely helpful.
If it was my rental I would change the due date of the payment. It sounds like your dad knew about this before you acquired the unit from him. I would also make them sign a new lease stating the change in due date. If the rent isn't in by midnight on the tenth I would hit them with a late charge, or if it is that much of a hassle I would not renew there lease. Hope that helps just my two cents.
Your state may be different then mine but typically you will need to give them a 30 day written notice before enforcing any changes.
I would look to have them sign a new lease.
One solution would be to switch the due date to the 15th. They'll have to pay 1/2 a month extra rent to buy those 15 days. I have successfully done this before to accommodate a change in a tenant's budgetary situation.
If they aren't cool with that, you have a couple options:
1) Hit them with the late fee until they change their minds. Of course, your efforts to force them to comply may backfire if they decide to move out.
2) Let it slide. If Pops says they pay on the 10th every month, take care of the property, and have been there for awhile, I would let them slide. Consistent rent 10 days late from a good tenant who cares about the property is better than rolling the dice on a new tenant...
If you approach them politely and respectfully, you may be able to avoid the choice between 1 and 2 altogether. Explain that you can't waive the late fee for them but not for other tenants, you have to be consistent with your policies across the board, but you want to work with them to solve the issue because you value them as long-term tenants. They'll likely be willing to put some money each month towards buying that 15 days and getting things correctly on track. On the other hand, if you come down as the new boss in charge and start changing the understanding they had with your old man, you'll lose their respect and gain their resentment. Understand things from their perspective when you deal with them, and they'll happily work with you to rectify the situation. Hopefully...
I hope this perspective helps. To make it easier on them, you can move the due date to the 10th for 1/3 month's rent. I just like to keep it simple and have all my tenants pay either on the 1st or the 15th so rent arrives more or less in batches.
I was going to say what @Troy Zsofka said above. If they are good renters I would try to work it out with them. They did tell you the reason why they pay on the 10th and didn't come up with a lame excuse. Changing the due date should solve their problem. If that does not work than just charge them late fees until they shape up and realize they are losing money for not being on top of their rent payment.
In my real estate experience, I've seen charging a late fee to fix that situation up quickly. They will be penalized and will prioritize. Check the lease and current laws regarding late fees.
However, it may not work and if they continue to be late. You may have to evict them especially in a situation that does not work for you.
Granted, I'm new at this, but I'm guessing they get paid more than once a month, and you're not a priority.
Maybe you could talk through their budgeting with you a bit. If they get paid on the 9th, it probably isn't their only pay day in the month. One option may be to incentivize early rent payment, versus enforcing a penalty on late payment.
I'd offer to move the due date to the 15th. They would pay half a month's rent on the 1st of the month when you make the change, then a full month's rent on the 15th. Future payments are due on the 15th. Or 10th, if that works better. A third of a month on the first of the changeover month.
It's not a change in a lease if your Dad waived prior late fees and your want to enforce this month's fee. Most tenants will dislike you when you're a dick about collecting late fees but it's not something that causes them to move. Avoid any personal relationships with your tenants and you're less likely to care what they think about you ;)
Inheriting tenants is a roller coaster ride for a few months. I keep my guard up. Get in and sign a new lease, set the new terms. In CA we need a 60 day notice of change if the tenant has been in unit for > 12 months. Once you get through the few month acclimation period of the new ownership everything should be smooth...
You need to decide what is more important to you....Enforcing your type A personality that demands rent on the first regardless of crcumstances because you are the landlord and they are the lowly tenant that should is blessed to live in your property and should always bow down before you OR think like a logical business man that recognizes the value in a long term tenant with a history of paying, albeit it late but for a logical reason and offer to make necessary adjustements that will benefit all parties.
If you can't tell from the verbiage above, I have a slight opinion on what you should do, but that said, I love taking good tenants from crappy landlords with a complex so I say go ahead with the first option.
If your finances are such that you have difficulties if rent is not paid on the first, then you are no different than your tenants that live paycheck to paycheck and are in fact a great deal worse due to your responsibilities as a landlord. If your finances aren't what's pressing you about getting the rent on the first, then get a software package like rentpost or buildium where you can schedule due dates tenant by tenant and let the software worry about who's late and what the late fees are.
I'm all for being firm and charging late fees in some instances. But it sounds like these guys really just need the date moved. Granted I would be a little irritated with a tenant telling me how things would go.... But pride comes before the fall. I would give them the option of either paying a late fee every month or moving the due date.
I second what everyone else has said -if they have been good tenants and always pay around that time, I'd have a new lease signed and change the due date - I'd also enforce the late fees.
If they are crappy renters - I'd still get a new lease signed since your dad is no longer the "Landlord" on the original lease they signed, leave the date at the first - let them hang themselves by disobeying the new lease, then follow your local laws and begin the eviction process after serving the proper notices etc.