Late Rent

[GR Pachmayr]

I recently acquired a duplex with tenants in place.  One of the tenants has been in the unit for 5 years.  She was always timely on her rent with the previous landlord and has always been pretty low maintenance.  The lease calls for rent to be due on the first and if rent isn't paid by the 3rd there is a $100 fee and $10 per day.  April 1 was the first day rent was due to me since buying the property.  I received the rent in the mail today, April 6 and it was postmarked April 4.  The lease is up at the end of May, and I would like for the tenant to renew.

My first question is, do you think the $100 late fee is too much?  It seems like it would be easy for a tenant to dig themselves into too deep a hole.  Rent is $550/month.  Depending on the feedback, I may lower the late fee to $75 or $50 in leases going forward.

The second question is, should I charge the amount that the lease calls for?  I think I know the answer to this one, but I wanted some feedback since I would like her to renew.  What does everyone think about me offering to lower it to $75 if she signs a new lease with the late fee lowered to $75?

[Levi T.]

Around these parts it's normally 10% of rents. I think the law also caps it in that normally. First month is always wonky, I would let her lease ride as a month-to-month for a bit and see if it was just due to ownership shuffle, or she's always late or no paying. Drop her like a hot rock if she is.

This is where most landlord get in trouble. They have one late or none paying tenant they are working with. Few months later they have another, then another, then they are living hand or mouth and putting off repairs, then I call and buy the property from them at 30-60% below what they paid as they want out or facing real trouble from the banks coming to collect.

Don't give anyone a mile. We apply late fees by the 5th, file court documents by the 10th and don't look back.