late fees

[rlack72]

$50 was just a number thrown out there.... not a real world number on that amount of rent.

I guess I am just too nice. It is not just about the money to me, it is about treating my tenants the way I would like to be treated.

[propertymanager]

My point is

$450 if it is early
$500 on time
$550 if it is late

This a $100 diference to the person paying rent.

That's ridiculous.  If your real market rent is $500 with a typical positive cash flow of $100 per month, you're giving away HALF of your cash flow for nothing!  That's CRAZY (just as Rich said).  In fact, it's simply financial suicide.  I don't give away half my cash flow to encourage something that I insist on anyway.

It is not just about the money to me, it is about treating my tenants the way I would like to be treated

NOT ABOUT THE MONEY?  Are you kidding?  I certainly would NOT run a business so that I can treat people nicely.  BUSINESS IS ALL ABOUT MAKING MONEY! 

Mike
 

[rlack72]

It is about making money. But that's not the only thing. I probably look at it a little differently then some of you due to the fact that it is not my only source of income.   

[Rich_in_CT]

It is about making money. But that's not the only thing. I probably look at it a little differently then some of you due to the fact that it is not my only source of income.   

Primary or secondary source of income has nothing to do with it.  When I invest in something I want a return, I'm not try to save the manatees.

[patat335]

I have a high first income, and i still don't give anyone a break for early payments, i think that nuts. i always stick to my 150.00 late fee, i found out that in fl as long as agreed you can charge a one time late fee  a rental month. i still did not get a confrim on how much but three source say it has to be signed by both parties so i guess my new lease are going to have a 250.00 late for the month and hopefully some of my tenants will be late.

Thanks Everyone

[rlack72]

Nuts it may be. But I have never had one late payment in three years. I don't know how many landlords can say that.

[tworent]

Nuts it may be. But I have never had one late payment in three years. I don't know how many landlords can say that.

I would say if you never had a late fee in 3 years then your rents are to low.
I think you need to push the limit of rents as high as possible. My 2 cents

[henryinma]

I think the rents and having a late fee have nothing in common. If your rents are too high, that means the tenant leaves and finds a place that's cheaper. It's how I get rid of bad tenants that scare away good tenants. Every time I tell them I'm raising the rent by a lot, they leave. Win-win for me.

If the tenants are late, that means they're having money trouble and maybe you didn't do a good job screening. Of course sometimes it doesn't matter what kind of screening you do, things happen.

Now the sign you're not charging enough rent is if you have a waiting list of people who want your apartments. Most people don't have that problem.

Oh and I don't think I've ever collected a late fee. Either they were evicted or left without paying the rent has been my bad tenants. We just have that rule in this state that you can't collect a late fee until it's 30 days late.

[Rich_in_CT]

Nuts it may be. But I have never had one late payment in three years. I don't know how many landlords can say that.

How many rentals do you own?  I'm guessing only a few and would guess it is merely good luck that you have not had any lates.

[propertymanager]

rlack,

Rich is absolutely right.  Not having a late payment in 3 years only means that you don't have many rentals.   If you have a lot of rentals, you will have tenants paying late (and being evicted) with some frequency.  We evict 1% per month on average due to non-payment.  If I only had one rental, that would take over 8 years before I would have a late payment/eviction  and that's my average with many low income rentals.  If you have all SFHs, your late pay rate should be significantly lower.  Also, as Rich said, luck plays a role in the equation.  If you have only a few rentals, you may not have a single late payment for 10 years and then have 50 the next year. 

Good Luck,

Mike

[rlack72]

I agree. I think my rent rates are a little on the low end and luck has a lot to do with it. I originally got the idea to give a break for my customers if they pay 5 days early or more from MrLanlord.com. It may not be the reason I get my rent payments on time.....but I don't want to change it and find out otherwise. I am the guy who wants a good deal for my renters and a good deal for me. It does not have to be all one sided.