Rent Grace Period and End of Lease Month to Month.

As a landlord, the most important task you will have is collecting rent and collecting it on time so you can pay your mortgage. In different states there are different rules so check your state statute before adding items to your lease. Most landlords give a grace period. Why? I guess they feel since the mortgage company's allow an average grace period of 15 days that they owe it to their tenants to allow a day or two.

In my lease I don't allow a grace period, as a matter of fact if I don't get paid on the first my first fine is 10% of the rent. Then each day after that its $50 per day. This strategy has your tenants looking for you on the first. I even have some tenants paying a day before the first. It works very well. Again check your state statutes so your not doing anything you shouldn't.

Another item I added to my lease is the end of lease month to month clause. A couple months towards the end of the lease I usually send out a letter letting the tenants know its been a pleasure and it's time to renew or move on, in a nice way of course. I give them the option of a one year lease with a reasonable increase in rent or a two year at double the one year increase or the option to end their tenancy.

So the item I've added to my lease is if they don't renew and decide to become month to month their rent will increase by 50%. This assures that there is a contract in place. Either they are going to look for a new lease or they are going to give you a good heads up as to what their intensions are. If they are moving out, having this information a couple months in advance helps you market the property a little sooner helping you to avoid a laps in rental income. I make this very clear as well as all other items in the lease so there is no question as to my expectations.

I make it a point to sit with the tenants before they sign to read every line and explain why that is in there and what I expect. My lease is by no means one sided. There are just as many items in there to protect them as there are to protect me. It makes for a fair relationship. I find having this sit down is good for both parties.

Well I hope these points help you, I find these points very helpful in collecting rents and they also keep tenants on their toes.

Good luck!!