What kind of late fee do you charge, and why?One-time charge of $XXXSmall fee that starts on Day X and continues to accrue daily until Tenant pays in fullCombination of a one-time charge and then a smaller daily feeWhat made you choose the method you currently use? Share your pros and cons!Any ideas for how to make a late fee system more effective?

i charge $25 a day after the 3rd of the month. while it may seem high its a good deterant to people who would try to pay late. i had guy just this month say he was gonna be a week late. i tell him thanks for communicating but we dont take partial payments and i explain the late fee again. he called back and tried to give 500 for his late fees. i told him if he couldnt figure it out his 600 rent could end up being 1250 for that month. the next day he payed off his late rent which ended up being 950. you have to be fair but firm. i explain the late fee before i let them sign the lease and AGAIN if they want to pay late. people are not upset when they are charged a fee, they are upset when they dont know WHY they are paying a fee. just be upfront and fair; it has worked for me and i get the feeling he wont be late any more.

I feel conflicted about late fees.I think the balance most owners (myself included) want to strike is to:a) make the late fee large enough to be a deterrentb) small enough that it doesn't create a big financial burden for the tenant.Since I am in Northern California the rent by itself is already a huge financial burden for many tenants. I have some single family homes in Vallejo, CA and I charge a $50 late fee. I've found this isn't much of a deterrent.On some more expensive property in Pacifica that I manage I charge 5% as a late fee and that seems to be more of a deterrent.In California you generally cannot charge more than 5% for a late fee as a matter of law.

I just charge $40 to $50 that month.I don't want to charge a daily late fee to make it unmanageable for them to dig out of the hole.On the 6th rent is late. I generally file an eviction (only $40) on the 15th unless previous arrangements have been made.Nothing I dislike more than a tenant that won't communicate why they are late or when they expect to pay the rent.

Rent is due on the 1st and late on the 2nd. I use appfolio and have the system designed to charge $20/day starting on the 6th to a maximum of $100 per Iowa law. Our typical property runs $15-1600 per month so $100 is enough for our typical tenant to want to avoid but not enough to break the bank. I always reserve the right to waive the 1st late fee assuming the tenant communicates the situation in advance. I choose not to have a grace period since a decent percentage of tenants will always pay on the last day. Our owners are paid out on the 15th and I want to be sure if we have a bounced check there is enough time to collect to avoid shorting the owner their mortgage payment. 3 Day notices to Cure or Quit are posted on Day 7 after the full $100 is charged. We're in constant contact with the tenant throughout this process to ensure we don't have to get to that point. If we have to file against them we would pass that charge along to the tenants as well.

@Nathan G. I tend to give my tenants plenty of choices to give them a sense of control also. Late fee:$55-Rent is due on the 1st. If they want to change that to the 5th like the last place they rented then it will be an additional $55 a month. (They usually end up choosing the 1st)-If they want to do split payments, 1st and 15th. It will be an additional $55 extra a month. (Never had split payments) -If rent payment is not paid two days after rent due date then the $55 late fee is added. 5-day pay or quit letter gets delivered on day 4. An additional late fee gets added every 5 days until the court date is set up for Unlawful Detainer. -Rent payment and all late fees will only be accepted in a cashiers check for the full amount due, and the next three months rent will be paid via cashiers checks.

@Nathan G. I charge $15 per day starting after the 5th day and a maximum of 10% of the monthly rent. I’ve had some tenants pay $150 extra per month for the last year.

@Nathan G.I charge a flat fee just below the maximum allowed in my state’s landlord tenant laws which is 10% in Washington. Rent is due one the 1st and late after the 5th. I use Cozy with automatic payment reminders. Rent $1200Late fee $175If a tenant pays late the fee is automatically charged. My thought is I want to select the best possible tenants for my units and part of that is them paying on time. If possible, I never want to have to collect a late fee. I would much rather have my tenants pay on time.

@Nathan G.,Here's what my property manager does (he's also one of my mentors) ...My rent is $900, for example. If paid on or before the 1st, I get a $100 discount and I only pay $800. He collects my rent thru AppFolio via ACH. So, my rent is always on-time / early.Why does he do that?Because when a tenant goes late and he does have to take it to eviction, when it comes up in court, the judge awards him the full rent, not the discounted amount.Often times, the judge will only award the rent and not the late fees.Just wanted to put that out there ...

@David Dachtera that's a good point about offering a reduced rate for early rent instead of punishment for late rent.I charge $50 or 5% of the rent, whichever is greater.I used to charge a flat rate and then a daily increase but stopped it. Why? Because tenants would always want to argue over how much they owed. They would count the days wrong or argue that they shouldn't be charged for the day payment was received. Or they would just continue racking up late fees until evicted and I wouldn't collect any of it, anyway.I prefer hitting them one time as a deterrent for future late payments. I cringe every time I read about a Landlord enthusiastically using late fees as additional income because that's going to come back to bite them eventually.

@Nathan G., we charge $25 if rent has not been received by the 5th. Typically we pro-rate rent but, if not, we do a plus-5 days approach.For us, it is easy to calculate and easy for tenants to grasp. We have been fortunate with good tenants, very rarely do we have a late rent payment.

What kind of late fee do you charge?What kind of late fee do you charge?

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