What is your late fee policy?

[Chris Harn]

Our current late fee is a flat $25 if not paid by the 5 day grace period. In the past I have not had issues but my current tenant seems content to take the late charge and wait to pay rent until I post a 3 day notice. The lease is up next month and I would like to make changes to the late fee policy on the next contract.

What is your policy on late fees, and is there a better way I can handle this situation to avoid this moving forward?

[John Warren]

@Chris Harn this really depends on your business model. Where is the property located? Is this a B area? C area? Can you get a better tenant that is less hassle? If so, I would not renew them and would spend the time leasing to a tenant that takes rent more seriously. Sometimes you have to fire tenants if they don't fit your business model. 

On the flip side, some folks actually like the extra income from late fees. I have one friend with an apartment building where the late fees have added like 40k in building value!