Charging Late Fees

rmason

Currently we charge a fixed late fee of $15 regardless of unit size.  Does anyone use the "percent of rent" option in Sitelink?  If so what percent do you use?  Any pros and cons of switching from "fixed" to "percent of rent" option for late fees? Thanks.

Orkocean

You have to go by your state statutes. Some states allow percentages based on the amount of the rent, some states only allow set amounts instead of percentages.

rmason

Thanks.

JamesStorage

@rmason I would go for a flat rate whenever possible personally. That way if the tenants decide to compare notes (It's happened) They can't raise a fuss over it. Plus if someone has a small unit like a 5x10 or something, they aren't likely to be fazed by a percentage late fee.

sonyawiprud

Personally I wish we went by percentage rate here, because at a flat rate, people that like to be late on 10x25's that rent for $400 aren't feeling the urgency at all, while people in a little old $50 unit are definitely feeling it. 

Orkocean

sonyawiprud said:

Personally I wish we went by percentage rate here, because at a flat rate, people that like to be late on 10x25's that rent for $400 aren't feeling the urgency at all, while people in a little old $50 unit are definitely feeling it. 

Your location says you're in Cali, why don't your owners use the California late fee schedules? 

Faye

We charge 20% of monthly rent or $20.00, whichever is greater.

AKKathie

$20 or 20% of unit rent, whichever is greater.

CVSSSTORAGE

we just started doing the percent thing and boy are people upset about a $51 late fee =/

i43storage

CVSSSTORAGE said:

we just started doing the percent thing and boy are people upset about a $51 late fee =/

Wow.  I would be too!

ESS

We do a straight fee of $15, twice a month. I personally don't think it's fair to base it of of a percentage. A tenant is paying you more money in rent for a larger unit, so they should be penalized for bringing you in more money because they are late? I would def take my business elsewhere. 

Orkocean

Not that I care either way but just because I always have to be the devils advocate...

The same could be said for the opposite, your tenant renting a 5x5 for however cheap it is will be paying the same late fee's as someone renting a 10x30. It's like taxes, the more you make, the more you pay.

Just as an example it's a good incentive to make sure your big units pay their bills on time as they don't want to get that hefty fee. We have a customer at this site with a 20x20 for $440 a month, when we came here and they were still just a $10 late fee these people would go long periods without paying and always wait until the last day before the next month would hit with us having to hound them all month long. Now with their 20% fee they always pay on time before they get the fee and we don't ever have to bug them.

dbudgen

I agree with @Orkocean, besides the higher late fee only helps our bottom line. We do use the California late fee so we have different fees for different prices.

$60 or less  $10
$61 to $99  $15
$100 to $133.33  $20
$133.34 and up 15% of rental rate

We hardly ever have our large units go late.

sonyawiprud

Orkocean said:

sonyawiprud said:

Personally I wish we went by percentage rate here, because at a flat rate, people that like to be late on 10x25's that rent for $400 aren't feeling the urgency at all, while people in a little old $50 unit are definitely feeling it. 

Your location says you're in Cali, why don't your owners use the California late fee schedules? 

We are just now considering moving to the California late fee schedule, can you give me some insight on how that will look? Do we need to formally notify our existing customers that we are switching? Our rental agreement does state "any addendum can be included" or something to that effect. Thanks in advance, Sonya

MamaDuke7

sonyawiprud said:

Orkocean said:

sonyawiprud said:

Personally I wish we went by percentage rate here, because at a flat rate, people that like to be late on 10x25's that rent for $400 aren't feeling the urgency at all, while people in a little old $50 unit are definitely feeling it. 

Your location says you're in Cali, why don't your owners use the California late fee schedules? 

We are just now considering moving to the California late fee schedule, can you give me some insight on how that will look? Do we need to formally notify our existing customers that we are switching? Our rental agreement does state "any addendum can be included" or something to that effect. Thanks in advance, Sonya

You will need to give everyone a 30-day notice that you're changing.

I do find it makes a difference in the amount of late people!  

i43storage

In Wisconsin, we can charge a late fee of $20 or 20% on the 5th day they are late.  We can charge more than that, be we have to be ready to prove in court that the higher late fee was reasonable.

AWSS7505

how do I make my late fees reoccurring? Currently my late fees are only charged the 1st month and nothing after.

MamaDuke7

AWSS7505 said:

how do I make my late fees reoccurring? Currently my late fees are only charged the 1st month and nothing after.

Setup - Past Due Schedule - Late Fee #1 (or whichever one you use).  Make sure there is no check next to the box that says "One time late fee, apply first month tenant is past due."