Rent grace period questions

[Adam Beckstetdt]

I am about 1 year into landlording my own properties and have a few questions on lease grace periods and what others have done. We have rent due on the 1st and then a grace period till when the late fees hit so some tenants view it as due the day before late fees apply. Late fees apply on the 7th so they pay from the 1st to the 6th. This creates alot of undue contact and driving on our part since we dont have all online payments. 

Im wondering what others do for late fees. Do you set them up to start the 2nd? Or do I use this as a sign to replace the tenant. Or is this just something we all deal with. We are typically lenient on 1-2 offenses of late but it is habitual at this point and they have stated that they feel if its before the 7th then they are good because the lease doesn't impose fees till then.

My idea for a solution was to send a letter of options for the offenders. Either increase rent $25 a month and leave them the "option" to pay 1st to the 6th. Or a lease amendment that states late fees start on the 2nd and no rent changes.

Thanks for your time

[Jim Adrian]

@Adam Beckstetdt

Its tenants responsibility to get you rent.  Always charge the late fee.  A flat late fee is easier to manage and I would consider increase late fees to $50, $75, $100 or 10% of rent.  If the late fee is $25; its not heffty enough to send the message "Don't be Late!" Have a default late later and send it every time via email and mail.  There are plenty of ways for the tenant to get you rent.  Banks have automatic bill pay and its not hard to set up.  I hear Cozy, tenantcloud and erentpayment work well for online payments and are free or minimal cost.  I would spend some time looking for some online payment methods.   I would change your grace period as well to like 3 days or eliminate it.   I had it 5 days and always got rent on the 4th.