Start Collecting Late Rent Fees
Most experienced rental property owners will tell you that it’s not uncommon for tenants to pay their rental payments late. And it can cause financial problems for landlords who have their own expense to pay. Even the rental property itself has its own financial obligations that must be met - everything from property taxes, mortgages, repairs and utilities all must be paid on time. It seems the only one who doesn’t have to be paid on time is you, the property owner!
Beyond financial, tenants that make late rental payments can create bookkeeping problems and bookkeeping problems means time. What does time equal? Time equals money!
What offsets all this is the compensation of the Late Rental Fee.
Every lease should have built in a provision that late tenant rental payments will result in a late fee. While the City of Philadelphia controls just how much Philadelphia rentals can charge, it still amounts to just enough to offset some of the inconvenience.
As a property manager I take steps to insulate my property owners when tenants make late rental payments and of course we do extensive screening read this article on tenant selection
But here are some tips on setting rental late fees
- You must allow for any state required grace period. White rental payments are due on whatever date is set in the lease (often the 1st of the month) many states require landlords to give the tenants a grace period. It can range from 3-10 days depending what state your rental property is in
- In Philadelphia, we are not allowed to charge over 10% of the monthly rent as a late fee. So the rental late fee for a $1000 a month rental can’t be more than $100.
- The lease also stipulates “how” rental payments are to be made. If the rents are to be mailed then the postal mark is the decider whether a rent is late or not.