Late fees! What say you?

[Clinton Davis]

I need a serious update on my late fees but I'm at a loss on what to charge.  Now I am lucky in that I only had one late rent payment last year and haven't had one since (knock on wood) but currently my late fee is only $40.  But I hear these big rental companies charging like $100 and a percentage everyday after.  I think there is a fine line of keeping your tenant up to date and them never catching up and it can create a never ending cycle and resentment.  But what say you?  Thanks.

[Melanie P.]

@Clinton Davis Please note in Tennessee late fees are capped at 10% of the past due rental amount and may not be imposed until after a five day grace period. If the last day of the grace period falls on a Sunday or legal holiday the fee cannot be imposed until the next day.

I'd suggest assessing 5% on Day 6 and then an additional $20 a day until you hit the cap.