As a landlord, you hope that the rent is never late, but even the best tenants have financial setbacks. When things happen, the rent is going to be paid late once in a while. If you have a consistent rent collection policy in place and a system for screening tenants well, you won’t have to worry about late rent very often. Typically, we call the tenants first to let them know that rent is late and we are on top of the collection process.
Charging a Late Fee
With our properties, the rent is due on the first of the month. If it’s not paid by the third of the month, we impose a late charge. We recommend charging a flat late fee. Some companies will have the late fee increase every day, but if a tenant can’t pay until the 20th of the month, they’ll have a huge rent bill to pay. They might think it’s better to just leave rather than trying to catch up. Then, you’re stuck with a vacancy, which can be more expensive than collecting late rent from an otherwise good tenant. That’s why we recommend a flat late fee. We charge 10 percent of the rent if a tenant pays later than 5pm on the third day of the month.
Three Day Notice to Pay or Quit
If you have to go beyond a phone call, the next step is a Three Day Notice to Pay or Quit. We deliver this notice by hand or certified mail, preferably by hand because then the process moves quicker. This notice is the first semi-official step that’s taken before you go to court and file an eviction, which we hope you never have to do.
Hiring a Professional if Eviction is Necessary
If you do get to the point that rent isn’t being paid, and you have to file an eviction, we recommend that you hire a professional. Either a lawyer or a property manager can help you, and you should keep in mind that a lawyer will be far more expensive. When you work with a licensed property manager, it’s a smaller fee or part of their ongoing management services.
Try to put the best tenants in place, and work hard at developing a consistent rental collection
process. If you have any questions about how to collect rent on time, please contact us at Residential Leasing and Management.