5 Ways to Reduce Late Fees

Who likes late fees? No one!Tenants don’t want to pay late fees.  Even landlords don’t like late fees, as this means they didn’t receive their rent payment on time.

Late fees can be substantial. Depending on the state of residence and your lease, tenants may be on the hook for up to 10% of the rent amount. Late fees can be reduced or avoided with simple property management software featuring automated payments, tenant communications, and reminders.

5 Ways to Reduce Late Fees 

1.     Pay rent electronically.  If you are still paying rent by sending your landlord a paper check, the likelihood that your payment will arrive late increases significantly. The postal service may deliver it late, lose it, or deliver it to the wrong address. Theft is also possible as more individuals are involved in the delivery process.  Landlords don’t care why it is late…they just know it is late. By paying your rent electronically, you will always know when your landlord receives the rent, and you will have a confirmation that your rent was paid on time.

2.     Setup AutoPay.  When you setup AutoPay, your rent is paid on the due date every month so payments are never late.  If you use rent collection software like ScheduleMyRent, you receive a courtesy reminder every month that a rent payment will come out of your bank account automatically.  If you need to, you can still change the date or amount of your payment anywhere or anytime.  You also receive an electronic receipt when your rent is paid.  

3.     Receive reminders.If you don’t want to use AutoPay, wouldn’t it be nice to receive a reminder that your rent is due so you don’t forget? If your landlord is using landlord software like ScheduleMyRent, tenants receive reminders before rent is due. Tenants will receive several reminders until a payment is authorized.Once a payment is made, you will receive an electronic receipt of payment.

4.     Talk with your landlord.  This can be as simple as a quick text or email.  Let your landlord know if your rent will be late, indicate why, and when you will be making a payment.  Communication is important. If a landlord understands the tenant’s situation, they may be less likely to charge a late fee or start a court action.  The worst thing a tenant can do is to be silent.  Also, if you can pay part of the rent immediately and the landlord knows when the remainder is coming, your landlord may be more willing to waive the late fee.

5.     Don’t make it a habit.Avoid forming a pattern of paying late every month.  If you pay late every month, it becomes less likely that your landlord will work with you and waive your late fee.

A Landlord’s View of Late Fees

Almost every landlord has a late fee in their lease, but different landlords have different views on how late fees should work.  On one side, some landlords expect rent to always be paid on the date it is due, and a late fee will apply for all late rent payments. These landlords believe that the best policy is to strictly enforce lease terms, to ensure tenants pay on time and do not get in the habit of always paying late.  On the other side, some landlords are flexible, and don’t charge late fees, if the tenant is having problems but is communicating.  Their main goal is to receive rent payments, and to keep good relationship with tenants.

Which method is right?  As in most situations, that typical answer may be somewhere in the middle.  Most landlords have a late fee, but they also have a grace period for the late fee.  For example, a landlord with a three-day grace period may have rent due on the first day of the month, but won’t charge a late fee if rent is received within three days of the due date.  This gives the tenant some flexibility, and ensures the rent is collected timely.  When rent is received beyond the grace period, many landlords charge a late fee.

Landlords like using rental property software so they don’t have to track when rent is late and remember to add a late fee- this is managed by the software.  Landlords also use automated software so they don’t hurt the relationship with the tenant by asking for a late fee directly.  Some automated software programs, like ScheduleMyRent, automatically add late fees, but also allow the landlord to easily waive or refund the late fee. 

Avoid late fees and experience the joy of paying rent online, try Schedule My Rent.