Strategy #5: Implement Late Fees and Online Rental Payments Late fees deter renters from paying rent late, but it’s important to ensure your policies are clearly written in the lease and that they comply with these local laws. There are several states that limit late fees to 4-10.5% of the rent due and or a dollar maximum. Although most states don’t require a grace period before you can charge a late fee, a 5-day grace period can offer your renters some flexibility which can foster a better relationship. You can also use property management software to accept automated online rental payments to make it as easy as possible for renters to pay on time. Software can send renters automated reminder emails when rent is late and a bill for any late fees as well. CONCLUSION Although you can’t predict the future, you can take proactive steps to prevent or eliminate rental losses. Before the lease is signed, implement a comprehensive application and screening process to lay the foundation for reliable rent payments. Then, leverage TheGuarantors’ now so that you’re able to recover rental income loss if it does occur. After your renter has moved in, strategies like reporting rental payment to credit bureaus, enforcing late fees, and offering online rental payments can provide the right incentives to keep rent payments timely for years to come.
FRANK JACHETTA Director, SMB Platform TheGuarantors
Frank is a veteran in the real estate space with 17 years’ experience providing financial tools to landlords. He is currently expanding the reach of TheGuarantors’ industry-leading rent and deposit protection to independent landlords and real estate investors.
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