3rd late payment in 5 months
I need some suggestions on how to handle a situation with my tenants. This is my first investment property in a C class neighborhood, and I thought I had some good tenants, but there have been 3 late payments for rent in the 5 months they have been leasing my rental. They signed the lease in March 2024.
The first time they were late it was a couple of days past the 1st but within the 5 day grace period……Ok.
The second time, they notified me on the 5th that they wouldn’t be able to pay until the 12th. I charged them all the late fees and I was not happy and expressed my concerns, but I did get paid on the 12th.
Now, this 3rd time for this month of August, the boyfriend contacted me a day or two before the 1st and said they would not have the rent until the 9th of August. I told him that I would charge him the same fees as before. $50 late fee after the 5th and $5 fees each day late.
Today, is the 9th, and I just received a text from the gf asking me if they could pay this Monday the 12th because something is going on with her account for fraud and she has to go to her bank on Monday. She also asked if I could waive late fees until Monday. Each day like I mentioned is $5.
I want to respond with something like…
This is becoming a recurring problem and it seems to me like you all are not able to afford my rental. You have been late with the rent three times in the five months you have been living there. I am not waiving any late fees. Perhaps, it is best that we terminate the lease because I can’t continue accepting late payments until the lease is up.
Also, let’s say they are late with the rent every month until the lease expires, but they pay. Would you get them out of there when the lease expires? TIA.
Most Popular Reply
This is why I never buy C class properties. More headaches than I’m willing to deal with. They are cheap for a reason.
Hello Cherilyn,
I think you have a couple of options, the good news is that they are paying you, the better news is that you are collecting late fees.
1. If you go file for an eviction and they show up and pay their lease, they get to stay in the property.
2. One option you might try is to go to Bi- Weekly Payments, this way you collect on the same cycle as their paychecks.
As long as both of your tenants still have their jobs, I would ride it out, the 2nd thing is how are they maintaining the property, are you going to have to spend thousands of dollars on repairs because of damage to the property. Hope this helps.
My 2 cents...
I faced a similar situation in a unit I lease. The tenant (inherited) habitually paid late and I just let it go at first because she always paid. Rent kept coming later and later in the month so I reached out to connect with her and shared the expectation that starting the month after next I expected rent in accordance with the lease or I would begin enforcing late penalties. I gave her some runway to get her finances in order and although she can be a bit of a squeaky wheel, she pays on time for the past 2 months.
As the person is still paying, I would just stay on them about the late payments, collect the late fees and inspect the property to be sure they're not damaging the inside. Assuming they're on an annual lease, I would not renew and go month to month at the end of the lease. As long as they're paying and not damaging the property I would take that over having to turn the unit, handle a vacancy and then trying to find a better tenant in said C area. A paying bird in hand so to speak... as long as they're taking care of the unit and paying. Ultimately it may be too pricey for them but they've already moved in, I'd ride that train until they got there. The turn cost and placement will be the same... you'll just get rent from now until then. Caveat being as long as they're taking care of the unit. Hope that helps, LMK if you have any other thoughts or questions.
- G
#3 Managing Your Property Contributor
Once they are behind, they may have problems catching up. If you want to waive the $5 fee do it for 2 days only (Sat and Sun) assuming the bank isn't open on the weekend. They've had time during the week to get things sorted. If there really was an issue with fraud, they would have told you as soon as it happened, not on Aug 9.
This is why I never buy C class properties. More headaches than I’m willing to deal with. They are cheap for a reason.
Hi Cherilyn--I have done this: Face to face visit (hopefully you feel safe or take someone with--if not a call). Honest conversation about them being able to afford the property and expressing it appears they are struggling. Use the compassionate side (trust me I know this is super irritating). Incentivism them to get out of the house--we have offered full deposit return (obviously that is done day they leave--draw it up if you need to so they are comfortable). Other times we have hired and paid for the movers (careful here too). I can tell you in 25 years I have had one eviction. Pay them to get out--it will ALWAYS be cheaper than an eviction if needed. INCENTIVISE their exit of the property. At the same time, talk to multiple lawyers in your area--your area--that specialize in evictions and are in that court room ---your specific areas court room--all the time. Pick one and get them involved NOW. Interview a lawyer just like anyone else. If you end up serving them on the eviction, offer a bonus to the server to get it done in 24 hrs so it gets done pronto--best of luck
One more thing, once you get the lawyer involved if needed--they are cheaper than you think for this--you can disengage with the tenant which is marvelous. You are the power player so use your power to hire others to handle this.