Tenant Misses the 1st Again for Rent

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Tenant Misses the 1st Again for Rent

Alecia LovelessPro Member
Member since 2019 · 3k+ posts · 2k+ votes

I have a great tenant in a great building. She was an inherited tenant that I took over 3 months ago. She is a Gen Z’er who has a professional job working in a hospital and is very nice, professional, and keeps her apartment meticulously clean and well maintained.

When I sent out my introductory letter and questionnaire she indicated she preferred electronic payment so I set up what she requested. The first month she paid the 1st of the month. Last month she didn’t pay the 1st so I sent her a reminder email on the 2nd and she responded right away that it had slipped her mind and in 15 minutes the electronic payment was in my account.

It is now an hour and a half from the 3rd and no payment. I’d prefer to simply send a friendly email reminder and avoid late fees and hard feelings. I think she could be a good multi year tenant and if this is my biggest problem with her would you recommend me simply sending a brief reminder tomorrow? I’m still a small enough landlord that this isn’t a problem.

Thanks!

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
5y

When you're a day late on your car payment, mortgage, or insurance, do you think the companies are wringing their hands and calling you to see what's going on? 

Act like a business.

My policy is that rent is due on the 1st. If payment is not received by 11:59PM on the 4th, a late fee is charged. If the entire amount owed (including late fee) is not paid by the 10th, then I serve them a 3-day Pay or Quit on the 11th. If they don't pay in full by the time that expires, I file for eviction with the court.

Do you know how many times I talk to the tenant during that process? None! I told them the rules when they moved in and they have a copy of the lease agreement in case they forget. Your constant reminders are more likely to make her want to stop communicating with you. She's an adult and can figure out how to set a reminder on her smart phone or set up auto-pay with her bank.

Think about how a utility, credit card company, insurance company, mortgage lender, cell phone provider, and any other professional company deals with this and then mimic them.

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  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    5y

    @Alecia Loveless you are really complaining about a tenant paying on the 2, 3, or 4th,,,,, you really should not be a landlord, EVERYONE gets a grace period to the 5th - 10th 

    Good Luck 

    2Reply
  • H. Louretta Dawkins
    Property Manager · North Carolina & South Carolina · Member since 2021 · 44 posts · 18 votes
    5y

    Sticking to exactly what the lease states is the best way to run a business.  If you start babysitting one tenant, you will be expected to do the same with all tenants.  Rent due on the 1st, grace period until the 5th, late fee added on the 6th is the way it has been with all of my leases.

    1Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    @Alecia Loveless Assuming a "b" type property and generally solid tenant I think you are still at the stage with this one where you can pretend with her this is just a system and communication problem. And some of the online systems are a little balky and we have some folks who seem to feel if its in process by the first then thats fine. Especially over weekends cozy can be iffy. 

      If she is doing it electronically ask her to please schedule it so that everything is done before the first, and let her know you won't charge her the late fees this time since "these kinks are being worked out" and also say you do have to charge late fees if its not received after the Xth since you have other tenants who get charged and you need to treat everyone the same.

    Generally people don't get better if you don't set new standards, and the above is a way of politely resetting and keeping communication friendly. Next step is more definitive.

    0Reply
  • Michael K GallagherBusiness Member
    Real Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y

    I spell it all out in my leases.  Due on the 1st late on the 5th, and I spell out the late fees associated.  I did have a new tenant late a couple months into her lease but it was an issue on Zillow's end...I use their payment portal.  Basically she had set it up I got the notification that she had paid and then almost a week later Zillow said it had been cancelled.  So in the case of something like that where the attempt was made to pay and it was a system failure...thats when I work with them.  Another option is if she is the type of person that might be late...and you think she would like a reminder...or perhaps ask her, maybe she would love a reminder, thats something that a 5 minute email scheduled to go out every month on the last day of the month could handle.   To me that conversation and the reminder, not only helps you get paid, but to me that shows you are trying to help her and in my mind she would be more likely to stay for longer term.  Just my logic...

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  • Alyssa Dyer
    Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
    5y

    @Alecia Loveless good question! It can honestly be tough when you’re first running into these situations.

    

    When I was a landlord and self managing I had an auto-draft option that took care of the issue for the most part. If someone was late I’d send them a quick reminder and 99% of the time they’d pay. Since I only had a couple properties and I’d see them when I did small repairs I wanted to keep the relationship really amicable. Once it was the 5th I didn’t make any exceptions on late fees and I’d proceed with serving a “Pay or Quit” notice. Basically, I was firm on the terms but I didn’t mind sending the friendly notices personally.

    When I opened a management company and started managing properties for others I just made what I was doing automated. Our rent is due the 1st and is considered late on the 5th. So the system sends an automated email on the last day of the month to let tenants know rent is due tomorrow, on the 4th to remind them that day is the last day to pay and avoid a late fee, and on the 5th to remind them rent is late and that they’ll be getting a

    Pay or Quit. These automated messages helped get delinquencies down, and also helped reduce the number of calls we get asking for late fees to be waived or people upset when they do get that Pay or Quit.

    People are adults, but sometimes adults get busy and forget, haha. So we don’t mind sending the automated reminders and I didn’t mind sending those manually before I had software for to do it for me. But ultimately, we don’t adjust terms or waive fees if they forget. It’s not personal, it’s just following a contract!

    1Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    5y
    Originally posted by @Bob S.:

    @Alecia Loveless you are really complaining about a tenant paying on the 2, 3, or 4th,,,,, you really should not be a landlord, EVERYONE gets a grace period to the 5th - 10th 

    Good Luck 

    I don't agree with this. In my state pay or quit can go up immediately, late fees can be charged after 5 days. There's no 10 day grace period in my state. In any case, owners and property managers set the expectations for the tenants. Expect nothing, get nothing. In all the years I've been doing this, I have only had 2 late payments ever, and both of those were only late by 2 days, and one tenant that moved without notice (but was paid up until the end of the month and had a deposit). That's it. I have never collected a late fee, and that's the way I want it. If that were the case doing this one year, or one or two tenants, well you could just chalk it up to luck. After a decade and 3 figures worth of tenants, and through a pandemic, it's not luck any more.

    Our tenants know there are 3 things:

    1. Rent in full on time, every time, all the time.

    2. Don't damage the property.

    3. Don't cause trouble for me, the neighbors, the city.

    That's it. Those are the expectations, they are rock solid and non-negotiable. If you don't like it, there are other places to rent and you are more than welcome to find those places, and if you violate any of those you will be looking for another place. 

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  • Jim Spatzenfeld
    Investor · NorCal · Member since 2015 · 281 posts · 240 votes
    5y

    You guys are too strict. My tenants pay whenever, and as long as I get one month’ rent payment every month I’m happy and won’t file an eviction. For example I have a tenant that I inherited in 2005 and most payments in these 16 years were late, but out of the 192 payments due I received all 192 payments. I hate it when companies charge me late fees, so I don’t do it to others.

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    5y

    @JD Martin who cares if they pay a few days late, charge them a late fee, its only more money right :) But to complain about 1st - 4th, come on thats crazy. What is this person going to do when they are 2, 3 4 weeks,  OR 1, 2 3 months ? Rentals sure are better then having a job LOL

    All the best 

    0Reply
  • Leslie VillarealBusiness Member
    Real Estate Broker · Albuquerque, NM · Member since 2021 · 67 posts · 32 votes
    5y

    My husband and I are going through this same situation. We have let her 'slide' for the past couple of months, but each month it is getting harder and harder to get her to pay on time. I agree that being your own property manager needs to be treated like a business- but I am like you and I try to give the benefit of the doubt. I feel like this particular tenant is beginning to take advantage of my leniency and we will probably be terminating the agreement. It is a great house in a good neighborhood, so we shouldn't have trouble renting it out again. But, it is a hassle to get them out and the house cleaned and re-rented. My husband and I have agreed that the next tenant to go in will have to adhere to the rental contract and there will be no exceptions so that we don't end up in this situation again. Good luck to you! 

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  • Randall Weatherall
    Real Estate Agent · Memphis, TN · Member since 2019 · 261 posts · 253 votes
    5y

    Automate a reminder on the 1st, then the 3rd, and move on - not worth caring about until the 6th anyway.  That said, if she does run really late one month, on the 15th send an FED as a swift kick.  That will help you simplify things and keep her from feeling that you're supporting her and not other way around.

    0Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    5y
    Originally posted by @Leslie Villareal:

    My husband and I are going through this same situation. We have let her 'slide' for the past couple of months, but each month it is getting harder and harder to get her to pay on time. I agree that being your own property manager needs to be treated like a business- but I am like you and I try to give the benefit of the doubt. I feel like this particular tenant is beginning to take advantage of my leniency and we will probably be terminating the agreement. It is a great house in a good neighborhood, so we shouldn't have trouble renting it out again. But, it is a hassle to get them out and the house cleaned and re-rented. My husband and I have agreed that the next tenant to go in will have to adhere to the rental contract and there will be no exceptions so that we don't end up in this situation again. Good luck to you! 

     It's a hard lesson to learn but one learned early is one learned best. It is far easier to keep a taught line and give a little slack when necessary than it is to leave it all out there and then try to reel it back in when it's out of control. I've spent 30 years working with the public and people will take what you give them and will act according to your expectations. 

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  • Cory LucasPro Member
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    5y
    Great info on this thread, I too have an inherited tenant that is chronically late, but pays. I just send him a reminder now on the 1st if I don't see anything come through, I've tried to get him setup on auto payments to no avail at this time. So I'll send him a reminder then if he continues to not pay I post notices accordingly. He typically pays, but drags it out at times to the last possible day. Nice kid, but he keeps pushing the envelope to where he's likely going to get kicked out. Not sure if that's helpful info or not, but that's what I've done to this point. Maybe I shouldn't be putting myself through that hassle, but if he pays I'm ok with taking the time it takes to post notice, it's an inconvenience but the extra late fee is an incentive to deal with it. You've definitely got more seasoned investors than myself weighing in and some very helpful info.
    0Reply
  • Heidi M.
    Rental Property Investor · Reno, NV · Member since 2013 · 77 posts · 31 votes
    5y

    @Alecia Loveless sorry but this is not a great tenant. My lease has a 3day grace period and a 10% late fee. I send no reminders and no communication will start the eviction process. All my tenants either pay on or before the 1st.

    0Reply
  • Dan L.
    Rental Property Investor · Albany, NY · Member since 2019 · 125 posts · 47 votes
    5y

    It 100% depends on what your lease says, and what your state/local laws are. New York state is very favorable to the tenants. With the pandemic we could not even charge late fees. So I think that greatly changes the way you approach rent collection. But for me, rent is due on the 1st, 5-day grace period. If someone gives me the story that they get their check on Thursday which is the 6th of that month, I'll play the game for that month. Much better to wait one extra day, and keep a happy paying tenant, than get into an adversarial relationship. But that only works for that month. Most likely in the next month, Thursday will be in the first 5 days of the month, so I don't play the game then. Working around their payday is basically my only allowable exception. As far as reminders, I'll usually send a reminder midday on the 5th of the month if rent is not in, but that really doesn't happen often.

    0Reply
  • Aaron Ram
    Real Estate Investor · West Chester, PA · Member since 2015 · 7 posts · 2 votes
    5y

    @Alecia Loveless

    we use an online payment portal that sends email reminders. tenantcloud is our choice but ive heard of Cozy and a few others.

    it has an auto reminder as well as daily late fees that get electronicslly added on. you can make an exception and remove them - but my experience is that if theyre just lazy then theyll lay the late fee. if its something they cant afford month to month then even if you remind them they probably arnet living within their budget and shoukd find a cheaper place to live.

    1Reply
  • Michael King
    Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
    5y

    Per my leases, rent is due on the 1st and late on the 5th. Charge a fee that stings a little, that's how to train them. If they haven't paid by the 4th, I text a friendly 'courtesy' reminder. 

    Read Landlording on Autopilot by Mike Butler. BP also has a good book.

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  • Lymell Shabazz
    Member since 2019 · 1 post · 0 votes
    5y

    Hi, my name is Mell. I read your post and I know, if you can send a monthly reminder to all tenants then this should keep down all hard feelings due to proper procedure. If it isn't then I'll make it part of my new beginning...

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  • Aj Parikh
    Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
    5y

    I would send a reminder again highlighting that the lease states rent is due on 1st of the month. If it is received afterwards, it is considered late. Tell her that you are also bound to a contract. So you have to follow the lease or you as a landlord can be in trouble. 

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  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    5y

    This is the norm for half my tenants. Lol. They all end up paying eventually with some late fees. I don’t sweat little things like this. If this bothers you then you’re probably in the wrong biz.

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    5y

    @Alecia Loveless are you really complaining  about a tenant paying one or two days after the 1st ?  You really should not be in the rental market. EVERYONE has a grace period till at least the 5th, many have  until the 15th.. Stop worrying about one or two days you will drive yourself crazy and piss the tenant off.

    Good Luck 

    0Reply
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