Rental late fees can really add up month after month and can actually help add to your NOI (Net Operating Income.) Of course, sometimes they aren’t something you can predict.
So one of my tenants that I have, who I absolutely love (for the most part,) are paying late again this month. This is the couple that Kathy met when they were looking for a place and recommended that I rent to them and I listened to her? Don’t know if you guys remember that post a while back. Anyway, they’ve been awesome with paying rent (they paid a few months up front before moving in) and I’ve been extremely happy with the way they keep the property. They are a hispanic family. It’s mom, dad and 3 children and they really treat the property as if it’s their own and it really looks awesome!
Anywho, last month the husband calls me and tells me the rent is going to be late because he got arrested :-O He apparently got a ticketing for driving without a license and didn’t realize that the laws in PA are different than the laws in FL and he got locked up in a short amount of time after getting the ticket for not responding to the ticket.
Now, I’ve had rental properties for over 11 years now and I’ve heard all kinds of stories but I can honestly say that he sounded really upset and embarrassed about getting arrest. He said “it was either pay the rent or pay to get out of jail.” Obviously, he paid to get out of jail.
Their rent is due BEFORE the 1st of the month every month. So the end of Feb. he calls me and explains the above to me and says he’s going to send me $500 now and a post-dated check for $475 (for a week later that includes $50 in late fees.) I said ok. I mean I’ll take an extra $50, right? Their normal rent is $925, but there’s a $30 late fee charged if the payment isn’t received by the 1st and then an additional $20 if the payment isn’t received by the 5th of the month.
I get a call from the tenant today saying that having to pay the water/sewer bill ($221) set him back again this month and that he just sent the rent in the same way he did last month. He said “I sent you a money order for $500 for right now and a $475 check that’s post dated for next Thursday.” Sooooo he already knew to include the late fee. Excellent!
Now between you and I….I honestly, don’t mind if they pay their rent like this every single month. My mortgage is about $575 and not due until the 15th of every month (the latest date, of course, that it can be paid with no penalty.) So an extra $50 a month works out well for me.
What do you all think? Are you happy when your tenants are late and pay you your late fees? Now keep in mind I’m talking about the types of tenants I’m describing above…I’m not talking about dead-beat, losers tenants that you know you’ll most likely be evicted shortly anyway. The kind of tenants that you have to call and say “What’s up? Why haven’t you paid your rent?” I’m talking about the kind of tenants who perhaps had a “glitch” in their life but they are courteous enough to call you and give you a heads up and they make an effort! Grant it, I’d like the entire rent amount up front every single month, but hey….an extra $50 a month….why the heck not???? What’s your take? What are your late fees that you charge?