How I Collect Late Rent Fees
by Richard Shaw
(Brockton, MA. USA)
I know that in many areas, you are not allowed to charge or collect late rent fees. What I have done for late rent collection is this:
I wanted to rent my property (3 bedroom home) for $1300.00. When I advertised the property for tenants, I listed it for $1400.00 per month.
This did two things: It weeded out those who thought that if they really saved and watched their spending, that they could afford the $1300.00 rent. In other words, the potential tenants that looked at the home had a higher income.
When I found the right tenant, I told them that if they paid their rent on time, they could reduce it by $100.00. This would apply monthly. The rent had to be in my hands by midnight of the due date. So in reality, the late rent fee is built into the rent.
I have two properties, the tenant for the first property has never been late with rent and has gotten the discount for 4 years straight. The tenant for the second property has been late in paying rent 50% of the time, which gives me another $600.00/year income.
This works for me... I also give both my tenants a turkey at Thanksgiving and a small gift basket at Christmas. Their bosses don't do it, so they appreciate it. The trick is to make them want to pay me first every month.
Good luck, and I hope this helps!