Inherited Tenants: paying/paid on the 10th.

[Christen G.]

I feel like I already know the answer to this, but would love ya'lls input, thoughts and encouragement, regardless: 

We've inherited tenants in a triplex all of whom were on M2M. Immediately we evicted the upstairs unit who was smoking in the house (while someone was living there on oxygen - wow! It's truly amazing this place didn't go up in flames!) and have started re-habbing it.  Once we got them out and got some things pulled up/ripped out, we definitely didn't know what we were getting ourselves into...and its eating some budget up.  No worries, we'll get through this, have some reserves, are polishing it up and will get it rented. I'm trying to stay positive on this unit b/c it's really a nice place (after 2 coats of Kilz, new floors and a paint job. ;)

Anyway, it's what happened this month with one of the the lower units that's bumming me out: A man, wife and 2 teenage daughters live in / have lived in this place for a while. It's in fine enough condition. The man is our main contact there and he's been very vocal since we acquired the building that he gets paid on the 10th and can't pay rent on the 1st. As the transition happened very quickly for these tenants (and all were very much spooked) we gave him a 1-month grace period / allowing him to pay on the 10th that first month and told him in no uncertain terms that the following month rent needs to be paid on the 1st and is late on the 5th.  Well...here we are, I drove down and posted notice - outlining the late fees and starting eviction. Mailing the other copy today. And he's calling saying the same thing: it will be late every month and he can't afford it with the late fees.  We responded that we needed notice to vacate by the 10th and if he can't afford rent with late fees then he wouldn't like our eventual rent increase (planned for 2 mo from now on all units).

My friends (not in real estate) are all like "just let him pay on the 10th, why is that so bad?" And trying to explain to them about how we set the rules so that we have the upper hand/how to train tenants isn't working/helping - it's just making me sound like an *******. To add a bit more backstory: the seller was very forthright in telling us that this man, "...occasionally pays late but he's a good guy" -- so we know that even if we give him a break and let him pay on the 10th -- it'll probably still be late. I KNOW IT'S A BUSINESS. But it sucks thinking about a man having to move his family b/c he can't budget correctly. And it sucks having to think about re-habbing another unit when it wasn't budgeted for.

Thoughts? Suggestions? Advice? Words of encouragement?

I've attached some photos of the smoking unit bc why not?

Thank you.

[David Tiemann]

Sometimes I have to take a step back and put myself in my tenants shoes. They live pay check to pay check. That’s why they are renters not owners. They have poor budgeting skills.
That being said, I always want to move myself to the ‘top of the money chain.’
One way to do this is to make the rent due at the same time your tenant gets paid. He gets paid on the 10th then make his rent due on the 10th, his pockets are now full.
I currently have 36 units and we have about 6 or so that have due dates that are not the 1st. It has worked very well for us, just a little more work to keep track of.
Don’t misinterpret this as being soft, I will always charge a late fee, and if the rent is late you will get a ‘pay or quit’ notice.
Good luck!