Do you prefer to collect late fees or not have them at all?

[Jeremiah H.]

I got into a discussion today with a local property owner that manages most of his properties in house. He loves the fact that his tenants typically pay late and he collects late fees. It got me thinking about the variable cost of collecting that money and if it's worth it. I realize there are many factors to this, but in general, would you rather your tenants pay on time or pay late and you collect the late rent fee?

[Benjamin Timmins]

You have to have late fees and enforce them. Its the only way to train the tenants to pay on time. That land lord you were talking to probably lets the tenants pay as late as they want to with the late fee. I guess that works if you aren't relying on the income, and it doesn't matter if the tenants pay on the 30th instead of the first. Ask that landlord if he has ever filed an eviction, I bet the answer is no. Id also be curious what his turn over costs are when a tenant leaves. Id bet its a fortune. Tenants that are constantly late usually aren't all that easy on the property.