Tenant with Late Rent Payment Twice within 4 Months!

[Cherilyn Williams]

I just bought my first investment property, a SFH in January. My tenants moved in March 6, 2024. I require that my tenants sign up for automatic rent payment through Rentredi in order to lease from me. It is stated in the lease that rent is due on the 1st and they must agree to automatic payment withdrawals. The next month in April, I saw that the boyfriend disconnected his bank account from the automatic payments from the Rentredi app (He is the primary he has a 700 credit score, girlfriend has a high 500's)

The rent was not paid on April 1st due date. I contacted him and his girlfriend on the 2nd and told them rent is late and it was not automatically deducted from their account per lease agreement.  They stated they were having relationship issues.  I told them they have to turn in the rent that day and if they don’t pay by the grace period of the 5th, there will be a $50 late fee and $5 for each day late.   I received payment later that evening, which was a relief, but definitely rubbed me the wrong way.

May & June paid on time by automatic payment withdrawal.  GREAT!

Here it is July 3rd no payment of rent again on 1st,, and his account once again is disconnected from the app.  I sent out a text to both, no response.  However, whenever any issue came up anbout the home, I addressed it immediately.  Any suggestions on how to move forward?  I thought my tenant screening was air tight, but apparently not.  Beyond frustrated…

[Theresa Harris]

Follow up again and then send them notice on the 6th.  it doesn't matter if they are having personal issues, they are living in the home and have to pay rent.  If they don't reply, post notice that you are starting the eviction process for non-payment of rent.

[Cherilyn Williams]

Thank you for your feedback!  This is exactly what I plan to do.  It bugs me because I wasn’t going to rent to them initially because of the girlfriend’s low credit score, but he has a good job and they did own a home a few years back.  I tried to give them a chance.

[Kevin Sobilo]

Quote from @Cherilyn Williams:

I just bought my first investment property, a SFH in January. My tenants moved in March 6, 2024. I require that my tenants sign up for automatic rent payment through Rentredi in order to lease from me. It is stated in the lease that rent is due on the 1st and they must agree to automatic payment withdrawals. The next month in April, I saw that the boyfriend disconnected his bank account from the automatic payments from the Rentredi app (He is the primary he has a 700 credit score, girlfriend has a high 500's)

The rent was not paid on April 1st due date. I contacted him and his girlfriend on the 2nd and told them rent is late and it was not automatically deducted from their account per lease agreement.  They stated they were having relationship issues.  I told them they have to turn in the rent that day and if they don’t pay by the grace period of the 5th, there will be a $50 late fee and $5 for each day late.   I received payment later that evening, which was a relief, but definitely rubbed me the wrong way.

May & June paid on time by automatic payment withdrawal.  GREAT!

Here it is July 3rd no payment of rent again on 1st,, and his account once again is disconnected from the app.  I sent out a text to both, no response.  However, whenever any issue came up anbout the home, I addressed it immediately.  Any suggestions on how to move forward?  I thought my tenant screening was air tight, but apparently not.  Beyond frustrated…

@Cherilyn Williams, this is normal and there is absolutely no reason to be frustrated because this is a pretty typical scenario.

1. I think the MOST important thing to work on is your mindset. Start with your expectations. This is how you should expect things to go. If you had 10 B/C class rental units, you might have this type of issue going on at 1 of them at any given point in time. So, this is the work you're signing up for, so no reason to let it frustrate you.

2. You stated you were relieved by their payment after being late the first time. Make sure you have reserves so that a small temporary shortfall isn't impactful on you. If you needed to evict them and had no rental income for a few months while they were evicted and the time to get a new tenant in place that should not cause significant financial stress because although not regular happenings those things do happen.

3. I think you believed that requiring automatic payments set up would guarantee you on-time payments in some way. I personally don't see an advantage in requiring it. I have some tenants who do and some who don't. I don't think it impacts their timely payments as the ones who do just tend to by choice have greater financial stability to begin with and would likely pay on time anyways.

4. No such thing as air-tight financial screening. If it was easy, or simple then it wouldn't be lucrative to take on the WORK and RISK. There is the potential for a good return on investment specifically because it is NOT EASY.

5. You really don't have anything terrible going on here yet. I mean if they pay late and pay the late fee they are back to being a tenant in good standing in my book.

6. It sounds like you feel further aggrieved because you have been diligent in handling issues in a timely manner while they have been less than perfect. This isn't a personal relationship its a business one.

Even if I'm in the process of evicting a tenant, I will handle issues like repairs in a timely manner. That's the work I do. Plus, even in that extreme circumstance, by fixing things timely it prevents additional damage and completes repairs BEFORE the unit is vacant making it faster to be rent ready for the next tenant.

7. One thing I do do, is send rent payment reminders as a courtesy. This way there is no excuse for not paying on time as I have reminded them. So, perhaps at the end of each month send them a message to remind them about paying.

[Don Konipol]

Welcome to being a landlord.  It’s not like buying a Federal government bond.  A certain percentage of tenants will pay late, a certain percentage will default, and a certain percentage will require eviction.

The “problems” increase as the desirability of the property decreases.  I’ve had virtually no (okay maybe a FEW) tenant problems with my high end rentals; many many problems at the low end.  Beside non payment of rent here are a few tenant issues I’ve dealt with

1. Tenant refuses to pay rent because ac won’t get room temperature below 64 degrees

2. Tenants dog eats all window sills and moldings

3. Tenant refuses eviction order and chains herself to the house

4. Tenant continually claims “hardship” in court and judge adds additional time for eviction

5. Tenant paints all walls black

6. Tenant joins Army is sent to war zone and eviction stayed for 6 months

7. Tenant is murdered in rental and police rope it off for 2 months 

And this doesn’t even include my commercial properties!

[Cherilyn Williams]

Thank you. You are correct.  I thought the automatic payments would guarantee on time payment of rent.  But not if they disconnect their account, I guess.  I am also glad that I do have reserves to cover the mortgage, but I’ve been saving that money to buy more investments properties, but you have to do what you have to do in these circumstances.  

I was a property manager for my mother’s investment properties before she passed with dementia, and most of her tenants paid on time, except for one I had to evict.  I thought if I screened well like I did her properties, I would be ok.  But like you say, the class of the property makes a difference as well.  Her on time tenants were in A/B  class.  Her eviction tenant was D class.  My property is a C.  Thank you for your feedback!

[Adam Bartomeo]

To piggyback on what most of the others are saying, stay calm... a tenant being a day or two late when they have a five-day grace period is nothing compared to some of the challenges that you will face. Follow the processes and laws that are in place. We have a tenant that has been late every month for 4 years, no joke. She always gets caught up, is a great tenant in every other way, but has problems managing her finances. If she wants to pay 10% - 15% more every month due to late fees, that is ok with us.

[Cherilyn Williams]

Thank you for calming my fears. I always go into panic mode after the 1st if rent isn’t paid, especially now that it has been 3 days.  I’ll be ok. 😅

[Adam Michael Andrews]

I would send an email reminding them what it means being both on the lease and jointly and severally liable for the payment of rent and that you are required to follow all terms of the lease as written, including filing an eviction that will attach to them both if necessary. Then, I would forget about it until they actually reach the eviction stage because it's out of my control.

[Alecia Loveless]

@Cherilyn Williams I’m still full of cheerful optimism after being a landlord for 5 years but am in the same boat.

I have bent over backwards for a particularly difficult tenant and it has not worked out well.

I am learning to stick with the rules and to make less exceptions.

If you don’t get rent send a notice on the 6th and start the eviction.

In my state if you keep the documentation and rent is paid late 3 times it’s pretty automatic that you win the eviction. Check your laws.

[Cherilyn Williams]

Alecia -

I will have to look into this.  Thanks for the tip!  I am glad I am not alone in my feelings.   I thought I had every “T”crossed & “I” dotted with these tenants.. Everytime I hear a text alert, or my telephone ring, I am hoping it is them to give me some sort of explanation.  lol. Crazy.  I know it will get better.

[Cherilyn Williams]

Thanks for your insight.  I feel like I will be doing exactly this, unfortunately.  They are ignoring my correspondence which is not like them at all.  I really cannot stand lack of communication or lack of acknowledgement.  If there is a problem, just communicate for heavens sake!  Thank you.

[Joe S.]

It is what it is.  if it were easy everyone would be a landlord. At least they’re paying even though it’s late. What you have to worry about is those they want to stay without paying it all.

[Mark Cruse]

I think you are going too rouge too fast over something that has not materialized into anything major. Just dont let things get too far and escalate from this point, but you dont want to risk coming off as petty and annoying. If I get my rent by the 5th every month and they are very strong tenants who take care of my place, it´s utopian. There are so many things that will come up on this journey and to be all up in their mix over one day late, or elaborating over their personal issues can snowball into many issues down the line. What makes this work most efficiently is if the two parties mutually respect each other and are on the same page. If they really like and respect you and enjoy renting from you, it dramatically drives your business in a successful direction. Hovering over them at this juncture, over something this insignificant could just make them uneasy and resentful. The goal is to get great tenants who treat the place like their own for as long as possible. If your tenants start leaving at the end of every leasing cycle it will cost you dearly. Believe me, you will encounter so so much more and you will have to know how to balance it all and keep things moving. Trust when I say it gets much deeper than a day late. Dont sweat the personal business or stories either; they all have something. Dont be too passive because some will take advantage but dont be too intrusive either. As a newbie you seem to be doing very well and appear to have done your research. Congratz; I wish you the best. 

[John Morgan]

14 of my tenants haven’t paid July rent yet. Due on the 1st and I give them a 5 day grace period so I don’t expect it til the 5th. Then I usually have 5 or 6 people who won’t pay by the 5th. Not a big deal to me. I charge them $75 late fees. I tell my wife I’ll take her out on a date for every late tenant and I hope a half dozen or more are late every month. I survive and it’s good for our marriage. It helps her tolerate me buying all these rental houses. Lol. Most of my tenants are paycheck to paycheck. This is why they’ll rent their whole lives. Their priority is to get their car loan and cell phone bill paid..or else! lol. I have reserves so I sleep like a baby and don’t worry about all these late tenants I have every month. Heck, I just had one family 2 months late but they finally got all caught up yesterday. Not a big deal. I work with people. Life is too short to worry about things like this. You will get very wealthy with your rentals over time and you will deal with some tenants that won’t ever be able to pay on time. Just the way it is.

[Cherilyn Williams]

Wow!  You have a really relaxed and great attitude.  I really like how creative you are in dealing with late payments, and using that to enjoy and enhance your relationship with your wife.

Since I am doing this alone, I can’t afford to be so lenient or it could crush me.  But if I am able to grow my portfolio like yours, maybe I could become more relaxed too if a couple of tenants do not pay on time.  Thanks for sharing a fun and interesting perspective.

[Cherilyn Williams]

When managing one of my mother’s properties, I went though sheer hell with one of her tenants to get her evicted for nonpayment of rent, while also dealing with my mom’s failing health with dementia.  Going through that experience was the worse, and I told myself I would never have that happen to me when I started investing,   I guess that is what is causing me to be a stickler to the rules.  Plus, I verbally told them before signing the lease, that automatic payment withdrawals are mandatory on the 1st of each month in order to rent my home, and this is included in the lease.  I see he has disconnected his bank account from the app entirely for this month. I can understand that maybe they don’t have the funds in their account by the first, but just communicate that, I guess.  I am just trying to navigate when am I being too lenient, to a point of being taken advantage of and when I am being too strict to a point of running a tenant off.  I really appreciate you sharing your insight.  I agree with everything you are saying, and I don’t want to be that type of landlord because my personality isn’t really like that. Just trying to protect myself and not lose money on something I worked so hard to obtain.  Have a wonderful 4th!

[Don Konipol]

Quote from @John Morgan:

14 of my tenants haven’t paid July rent yet. Due on the 1st and I give them a 5 day grace period so I don’t expect it til the 5th. Then I usually have 5 or 6 people who won’t pay by the 5th. Not a big deal to me. I charge them $75 late fees. I tell my wife I’ll take her out on a date for every late tenant and I hope a half dozen or more are late every month. I survive and it’s good for our marriage. It helps her tolerate me buying all these rental houses. Lol. Most of my tenants are paycheck to paycheck. This is why they’ll rent their whole lives. Their priority is to get their car loan and cell phone bill paid..or else! lol. I have reserves so I sleep like a baby and don’t worry about all these late tenants I have every month. Heck, I just had one family 2 months late but they finally got all caught up yesterday. Not a big deal. I work with people. Life is too short to worry about things like this. You will get very wealthy with your rentals over time and you will deal with some tenants that won’t ever be able to pay on time. Just the way it is.

Good for you! You found a method of operation that works for you and you are successful at it. But I’ll bet  you’ve developed a great “feel” for when to “work” with a tenant and when to get “tough” 

[Don Konipol]

The Five Funniest Excuses I’ve Received by Tenants for Not Making Rent Payments

5. I had to get my dog back from Brazil

4. I was in a car accident and had amnesia

3. My husband discovered I had a boyfriend and refuses to pay the rent

2. I checked around and the rents too high (after living there 6 months into a 12 month lease)

1. I thought rent payments are automatically suspended when you change jobs 

[Michael Smythe]

@Cherilyn Williams if you have a Class C rental, you will need to be more aggressive on putting pressure on tenants to pay to stay.

I don't see anywhere in your posts that you automatically sent the tenants an eviction notice, did I miss that?

Our PMC doesn't care what the reason is for a tenant being late, our systems send an eviction notice for nonpayment of rent to "start the clock" and get tenants to communicate & cooperate.

We've found that if we don't start the clock, so there's a deadline for tenants, tenants just use excuses to buy themselves more time, at the expense of the owner.

Desperate people say & do desperate things!

Of course, we do our best to be empathetic and understanding with, "life happens issues", but we do NOT let tenants make their problems our problems - as many of them try to do.

OPINION: this lease doesn't look good for the long-term. If the couple is fighting, emotions will rule their actions, not common sense or financial responsibilities. The boyfriend disconnecting his bank account shows that. Appears he is also the one most likely to move out of the property unfortunately. Do they both work? Can either afford the rent on their own? 

You may want to have a discussion with the boyfriend about the impact an eviction will have on his credit. How many tradelines were on his credit report and how many months have the tradelines been open? A credit score to us is just a number. Last week saw a 704 FICO score for an applicant with only 1 tradeline with just 7 months of activity. Not enough for us to immediately approve even though the automated system recommended "Approve".

[Cherilyn Williams]

Quote from @Mark Cruse:

I think you are going too rouge too fast over something that has not materialized into anything major. Just dont let things get too far and escalate from this point, but you dont want to risk coming off as petty and annoying. If I get my rent by the 5th every month and they are very strong tenants who take care of my place, it´s utopian. There are so many things that will come up on this journey and to be all up in their mix over one day late, or elaborating over their personal issues can snowball into many issues down the line. What makes this work most efficiently is if the two parties mutually respect each other and are on the same page. If they really like and respect you and enjoy renting from you, it dramatically drives your business in a successful direction. Hovering over them at this juncture, over something this insignificant could just make them uneasy and resentful. The goal is to get great tenants who treat the place like their own for as long as possible. If your tenants start leaving at the end of every leasing cycle it will cost you dearly. Believe me, you will encounter so so much more and you will have to know how to balance it all and keep things moving. Trust when I say it gets much deeper than a day late. Dont sweat the personal business or stories either; they all have something. Dont be too passive because some will take advantage but dont be too intrusive either. As a newbie you seem to be doing very well and appear to have done your research. Congratz; I wish you the best. 

Thank you for replying.  I just received a text today on the 5th that they will pay me next Friday on the 12th.  I will charge my late fee, and my additional fees for each day they are late.  I will give them a chance until next Friday, if they don't pay by then, I am sending a notice to pay up or evict.

[Cherilyn Williams]

Quote from @Michael Smythe:

@Cherilyn Williams if you have a Class C rental, you will need to be more aggressive on putting pressure on tenants to pay to stay.

I don't see anywhere in your posts that you automatically sent the tenants an eviction notice, did I miss that?

Our PMC doesn't care what the reason is for a tenant being late, our systems send an eviction notice for nonpayment of rent to "start the clock" and get tenants to communicate & cooperate.

We've found that if we don't start the clock, so there's a deadline for tenants, tenants just use excuses to buy themselves more time, at the expense of the owner.

Desperate people say & do desperate things!

Of course, we do our best to be empathetic and understanding with, "life happens issues", but we do NOT let tenants make their problems our problems - as many of them try to do.

OPINION: this lease doesn't look good for the long-term. If the couple is fighting, emotions will rule their actions, not common sense or financial responsibilities. The boyfriend disconnecting his bank account shows that. Appears he is also the one most likely to move out of the property unfortunately. Do they both work? Can either afford the rent on their own? 

You may want to have a discussion with the boyfriend about the impact an eviction will have on his credit. How many tradelines were on his credit report and how many months have the tradelines been open? A credit score to us is just a number. Last week saw a 704 FICO score for an applicant with only 1 tradeline with just 7 months of activity. Not enough for us to immediately approve even though the automated system recommended "Approve".

The first time they were two days late with the rent because of issues they were having, he said he moved out of the house and his gf said she was going to take care of it.  I told him, you are the primary lessee and he is the reason she is able to be there.  I told him he can't back out as the primary.  He makes more than enough money to stay there, she does not even qualify to stay there.  They both work, but he has the better job. When I checked his tradelines, he had about 7-9.  His bills were paid on time.  Her bills were not paid on time.  I told them I was not going to rent to them because of this and also I was afraid this would happen with them being bf and gf.

 I finally received a response today.  He just told me they can pay next week on the 12th.  I am not happy at all about this.  I am going to charge the late fee of $50 tomorrow, which will be the 6th, and a charge for each additional day they are late. (All clearly stated in the lease).  I will also state, they need to communicate this before the rent is due.  If I don't get the rent by next Friday, they will get a notice to pay within 5 days, or we will begin the eviction proceedings.

[Theresa Harris]

Quote from @Cherilyn Williams:

Quote from @Michael Smythe:

@Cherilyn Williams if you have a Class C rental, you will need to be more aggressive on putting pressure on tenants to pay to stay.

I don't see anywhere in your posts that you automatically sent the tenants an eviction notice, did I miss that?

Our PMC doesn't care what the reason is for a tenant being late, our systems send an eviction notice for nonpayment of rent to "start the clock" and get tenants to communicate & cooperate.

We've found that if we don't start the clock, so there's a deadline for tenants, tenants just use excuses to buy themselves more time, at the expense of the owner.

Desperate people say & do desperate things!

Of course, we do our best to be empathetic and understanding with, "life happens issues", but we do NOT let tenants make their problems our problems - as many of them try to do.

OPINION: this lease doesn't look good for the long-term. If the couple is fighting, emotions will rule their actions, not common sense or financial responsibilities. The boyfriend disconnecting his bank account shows that. Appears he is also the one most likely to move out of the property unfortunately. Do they both work? Can either afford the rent on their own? 

You may want to have a discussion with the boyfriend about the impact an eviction will have on his credit. How many tradelines were on his credit report and how many months have the tradelines been open? A credit score to us is just a number. Last week saw a 704 FICO score for an applicant with only 1 tradeline with just 7 months of activity. Not enough for us to immediately approve even though the automated system recommended "Approve".

The first time they were two days late with the rent because of issues they were having, he said he moved out of the house and his gf said she was going to take care of it.  I told him, you are the primary lessee and he is the reason she is able to be there.  I told him he can't back out as the primary.  He makes more than enough money to stay there, she does not even qualify to stay there.  They both work, but he has the better job. When I checked his tradelines, he had about 7-9.  His bills were paid on time.  Her bills were not paid on time.  I told them I was not going to rent to them because of this and also I was afraid this would happen with them being bf and gf.

 I finally received a response today.  He just told me they can pay next week on the 12th.  I am not happy at all about this.  I am going to charge the late fee of $50 tomorrow, which will be the 6th, and a charge for each additional day they are late. (All clearly stated in the lease).  I will also state, they need to communicate this before the rent is due.  If I don't get the rent by next Friday, they will get a notice to pay within 5 days, or we will begin the eviction proceedings.

Once you get the money, tell them that it is clear they are not able to afford the place and they should start looking for a new place to live.  If they leave by July 31, you won't charge them to break the lease.

[Cherilyn Williams]

Quote from @Theresa Harris:

Quote from @Cherilyn Williams:

Quote from @Michael Smythe:

@Cherilyn Williams if you have a Class C rental, you will need to be more aggressive on putting pressure on tenants to pay to stay.

I don't see anywhere in your posts that you automatically sent the tenants an eviction notice, did I miss that?

Our PMC doesn't care what the reason is for a tenant being late, our systems send an eviction notice for nonpayment of rent to "start the clock" and get tenants to communicate & cooperate.

We've found that if we don't start the clock, so there's a deadline for tenants, tenants just use excuses to buy themselves more time, at the expense of the owner.

Desperate people say & do desperate things!

Of course, we do our best to be empathetic and understanding with, "life happens issues", but we do NOT let tenants make their problems our problems - as many of them try to do.

OPINION: this lease doesn't look good for the long-term. If the couple is fighting, emotions will rule their actions, not common sense or financial responsibilities. The boyfriend disconnecting his bank account shows that. Appears he is also the one most likely to move out of the property unfortunately. Do they both work? Can either afford the rent on their own? 

You may want to have a discussion with the boyfriend about the impact an eviction will have on his credit. How many tradelines were on his credit report and how many months have the tradelines been open? A credit score to us is just a number. Last week saw a 704 FICO score for an applicant with only 1 tradeline with just 7 months of activity. Not enough for us to immediately approve even though the automated system recommended "Approve".

The first time they were two days late with the rent because of issues they were having, he said he moved out of the house and his gf said she was going to take care of it.  I told him, you are the primary lessee and he is the reason she is able to be there.  I told him he can't back out as the primary.  He makes more than enough money to stay there, she does not even qualify to stay there.  They both work, but he has the better job. When I checked his tradelines, he had about 7-9.  His bills were paid on time.  Her bills were not paid on time.  I told them I was not going to rent to them because of this and also I was afraid this would happen with them being bf and gf.

 I finally received a response today.  He just told me they can pay next week on the 12th.  I am not happy at all about this.  I am going to charge the late fee of $50 tomorrow, which will be the 6th, and a charge for each additional day they are late. (All clearly stated in the lease).  I will also state, they need to communicate this before the rent is due.  If I don't get the rent by next Friday, they will get a notice to pay within 5 days, or we will begin the eviction proceedings.

Once you get the money, tell them that it is clear they are not able to afford the place and they should start looking for a new place to live.  If they leave by July 31, you won't charge them to break the lease.

Thank you for your advice.  I will do just this.  I can't imagine going through this the next 7 months...

[Mark Cruse]

Quote from @Cherilyn Williams:

Quote from @Mark Cruse:

I think you are going too rouge too fast over something that has not materialized into anything major. Just dont let things get too far and escalate from this point, but you dont want to risk coming off as petty and annoying. If I get my rent by the 5th every month and they are very strong tenants who take care of my place, it´s utopian. There are so many things that will come up on this journey and to be all up in their mix over one day late, or elaborating over their personal issues can snowball into many issues down the line. What makes this work most efficiently is if the two parties mutually respect each other and are on the same page. If they really like and respect you and enjoy renting from you, it dramatically drives your business in a successful direction. Hovering over them at this juncture, over something this insignificant could just make them uneasy and resentful. The goal is to get great tenants who treat the place like their own for as long as possible. If your tenants start leaving at the end of every leasing cycle it will cost you dearly. Believe me, you will encounter so so much more and you will have to know how to balance it all and keep things moving. Trust when I say it gets much deeper than a day late. Dont sweat the personal business or stories either; they all have something. Dont be too passive because some will take advantage but dont be too intrusive either. As a newbie you seem to be doing very well and appear to have done your research. Congratz; I wish you the best. 

Thank you for replying.  I just received a text today on the 5th that they will pay me next Friday on the 12th.  I will charge my late fee, and my additional fees for each day they are late.  I will give them a chance until next Friday, if they don't pay by then, I am sending a notice to pay up or evict.

Got to do what you must if you think it will be an ongoing problem. I hope the next tenant works out better. It will have to because if you switch out often. most likely you will have a losing asset. This is early in the game but the typical tenant turnover you have carrying costs. Most have a mortgage to pay with no income for a few months. Have to have all the utilities current. Have to usually do some kind of maintenance like painting, replacing something, cleaning etc. Maybe not so much here. Also, its cost in marketing and getting the right person in. Depending on the class of the property you are looking a few thousands of dollars every time. Depending on how many you go through, heaven help you if you have that, in addition to a major expenditure (i.e HVAC failure, roof) For people with not great cash flow, you wipe out yearly profits every time. The goal is to get a great tenant there as long as you can. I wish you the best. Keep us updated.