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How
to Collect Late Rent Payment and
How Much Late Rent Fees to Charge Tenants
Collecting
late rent payment from tenants can be an absolute breeze as long as you
know the right steps to take. Learn what are the tried and tested ways
of collecting late rent and charging late rent fees without
breaking into a
sweat.
How
do You Chase Your Tenant for Late Rent Payments?
Collecting
rent can be a real thorny issue if you are
unlucky enough to meet a difficult tenant. However chasing them
for late rent doesn't have to be a painful process.
To begin with, prevention is always better than cure so it will be
helpful to give your problem tenants a gentle reminder a few days
before the rent date. You can simply email them or give them a quick
phone call. This way they cannot use of the all too common "I forgot"
excuse on you when it's time to pay up.
If your tenant is still late in his rent payments, then it's time to
send him a late rent notice. To collect your late rent payment and
impose late fees, Click
here for our free late rent letter sample.
This
letter comes in two different flavors. You can either send him a pure
reminder letter telling him to hurry up with his rent payment or you
can
choose to charge him late fees.
Should
You Impose Late Rent Fees for All Your Tenants?
Charging late rent fees is optional so naturally there are two
opposing camps when it comes to this issue.
Some
landlords belong to the "Mr Nice" camp where they do not believe in
charging their tenants for late rent because they feel that
doing so
builds goodwill and trust. They are more casual and will let their
tenants off without penalty charges as long as they receive
their
rent in the end.
However, we
highly
recommend that you should charge late rent fees for a
few solid reasons.
From
our experience, we have discovered that some new tenants like to test the
waters with their landlords. They will purposely pay their rents late
for the first month to see how their landlord will react. If you give
in this first time, they will take it that you will be willing to
accept late payments in the future as well.
It's
human nature to hold onto their hard earned cash. It's that type of
mindset that drives tenants to delay their rent payments even when they
can afford to pay up right now.
By charging your tenants for late rent, you are sending a clear
message that you mean
business on your landlord issues. It will train your tenants to see the
importance of timely
rent payments by giving them an incentive to pay up on time.
How
Much Should You Charge for a Late Rent Payment?
Most
landlords generally set their late rent charges from 5% to 15%
of the rent amount. Some landlords may also demand a daily penalty fee
for every additional day that their tenants are late with payment such
a $10-per-day late charge.
Do remember that the aim of late rent
charges is to compensate landlords for any losses and not as a weapon
for milking and exploiting tenants.
If your late rent fees are too high
(anything above 30% of the rent is usually considered
excessive), your tenant can file a complaint and take you to
court.
Who
Keeps the Late Rent Fees? - Landlord or Manager?
In
most countries, there is no law that states who will get to keep the
late rent charges so be sure to discuss this matter with your property
manager before you hire them.
It's a good idea to insist that
you will be given the late rent fees otherwise some shady property
managers may purposely allow your tenants to pay their rents late so
that they can collect late rent payment fees.
Allowing your
property managers to pocket the extra fees for late rent payment may
also
cause them to be
more careless when screening your tenants and invite more
unwanted troubles in the future.
Read
what our visitors have to share below OR Scroll down to
add your own comment
What are Your Best Tips for Collecting Late Rent or Charging Late Rent Fees?
If you are stuck with nightmare tenants, making sure that they pay their rent on time can be a real challenge for anyone. How do you collect late rent payments and charge late rent fees? Share your valuable experience with everyone here - We will love to hear your tips, comments and real life stories:
What Our Visitors Have to Say on Dealing with Late Rent
Click on the links below to read the valuable tips that our other visitors have to share:
How Do I Calculate My Late Rent?
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The rental contract with my tenants state that the rent is due on 1st of the month but a grace period is given until the 5th. It also states there is a ...
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