Posted by David on July 27, 2001 at 10:54:46:
Sorry…what I meant was :
We tell our tenants that the rent is due on the first of the month. By the way, we happen to operate in California.
I didn’t mean to imply a direct connection!
rent due date - Posted by MOG
Posted by MOG on July 26, 2001 at 14:47:10:
hello every one,
I put a post up a few months a go “To rent or to sell”
Thanks for all the replies
Well my wife and I decided to rent. We have (what we believe) a decent tenant prospect that we are going to sign a lease with today. His credit wasn’t the best but he worked for 3 years as an apartment maintenance manager so I should have less maintenance headaches. His pass landlord says he pays early.
We will be getting $1075/mo and that is the high end for a single family dwelling for our area. I really learned that you won’t know how high of rent you can get until you advertise it and see.
I was wondering does any one have any tips on when to set the rent due date?
I have heard that the 25th is better than the first.
Does it depend more on when the tenant gets paid.
the tenant gets paid on the 10th and the 25th
Any pros or cons to what’s the best?
Plus does anyone have any rent collection tips
Re: rent due date - Posted by JohnBoy
Posted by JohnBoy on July 26, 2001 at 23:02:39:
For us the law in our state allows a 5 day grace period before rent is considered late. Most tenants seem to always pay the 5th day. So we make rent due on the 25th of the month prior to the month rent is due for. On the 1st the 5 day grace period is up and rent is late if not paid.
Most mortgage pyments are due on the 1st. I’m not a bank or in the business of financing tenants their rent money for a week every month while I have to pay the mortgage by the 1st and they pay me by the 5th.
They pay on the 25th and are late on the 1st. That way if they ride out the 5 days allowed by law, I’m still paid by the 1st. Otherwise late fees kick in and a 5 day notice is served. We have to give a 5 day notice in our state. Some only require a 3 day notice.
You need to check on what your state laws are.
Re: rent due date - Posted by DanT
Posted by DanT on July 26, 2001 at 17:36:12:
All our rents are due on the first, late on the fifth with a late fee due. On the sixth tenant gets a 3 day notice. (preliminary to eviction in our area) We pro-rate rent to the first if they move in during the month so all will be due at the same time. DanT
Re: rent due date - Posted by William Bronchick
Posted by William Bronchick on July 26, 2001 at 17:33:37:
Keep in mind that state law may limit when you can collect late fees for rents. In some states, rent is not legally “late” until 10 days after the due date. Collecting early could run afoul of fair debt collection laws and consumer protection statutes.
Re: rent due date - Posted by BR
Posted by BR on July 26, 2001 at 15:24:52:
I’ve been using the 25th for several years now, and it works well for me. The fact that your tenant gets paid on the 25th makes it a perfect situation. Louis Brown wrote an article on this subject that can be found in the articles section. His recomendations are right on!
Tips? The worst thing you can do is make a rule and not enforce it!
Borrowing from Peter to pay Paul… - Posted by SusanL.–FL
Posted by SusanL.–FL on July 27, 2001 at 11:29:14:
so to speak.
On one property in particular (that I have since closed on), I should have checked my dates out BEFORE I filled out my contract with my buyer.
My mortgage (Wash. Mut) was due on the 15th (grace period due: 30th).
My buyer was due to pay me on the 25th. His “prompt payment history” lasted all about two months and for the next 33 months, he paid me about 9:00 p.m. on the fifth day of his grace period. grrrrrrrrrrrr
We’d see the car lights driving up the driveway–“THEEEEEEEEEEEEEEEEEEEEERE’s Roberto! Rent must be due”!
He paid me on the 30 which was the day MY grace period was up and since I haven’t had the money to cover his payment and pay my mortgage, I wound up paying late fees.
grrrrr
(Live and Learn!)
Re: rent due date - Posted by Wayne-NC
Posted by Wayne-NC on July 27, 2001 at 08:38:15:
You have some good points but why not take advantage of your mortgage company’s grace period as well and set up an automatic bank draft on the 14th? Now you have use of the money for 10 days or so or time to collect over due rents.
I don’t prorate the first month - Posted by John J
Posted by John J on July 27, 2001 at 24:21:06:
I charge a full month’s rent plus the deposit up front no matter when the tenants move in. I then prorate the second month. This eliminates the people who want to move in on the 25th because they can barely scrape together enough $$$ for 5 days rent, deposit, and moving expenses. Then the 1st rolls around real quick and they are still recovering financially from moving. Just because someone has good income does not mean that their spending priorities are such that the rent will always get paid first.
Re: rent due date - Posted by David
Posted by David on July 26, 2001 at 16:28:57:
Check on any requirements specific to your state/county/municipality.
For us, in California, rent is due on the first.
Check out C&A Solutions at mrlandlord.com. We receive in the mail each month pre-authorized checks drawn on the tenants account. The tenants need only make sure sufficient funds are in the account on the 1st. No fuss, no muss.
Here’s the fix . . . - Posted by JoeKaiser
Posted by JoeKaiser on July 27, 2001 at 21:36:57:
One of the smartest moves I ever made was deciding early on to immediately get a month ahead on whatever mortgage I ended up with. Get it closed and make two payments right off the bat.
Now, on the mortgages where I’m writing the checks, I pay around the 10th of the month with my tenant’s money. Sometimes I get busy and can’t get to them until the 15th or even a day or two later, but whenever it is they do go out, I’m still the month ahead and like magic . . . all that pressure and late fee stuff never even comes into play.
You can take out all the stress of paying mortgage payments where you depend on the rental income by getting a month ahead right off the bat. Like Martha says, it’s a good thing.
Joe
Re: rent due date - Posted by JohnBoy
Posted by JohnBoy on July 27, 2001 at 09:28:14:
That works fine, but making the rent due by the 25th ads an extra 5 days grace period to the mortgage loan. When someone is late going past the grace period where late fees have kicked in they tend to drag paying the rent out until the last minute.
If I make rent due on the 1st, they have 5 days grace period to pay before late fees or a 5 day notice kicks in. If they don’t pay by the 5th an a 5 day notice would be served on the 6th with lates fees added and then they would have until the 11th to pay. I can cut that back to the 6th by making rents due on the 25th, giving me the extra 5 days grace period before the mortgage payment is past due.
Since most mortgage payments are due on the 1st they become late by the 10th where lates fees would be added. I don’t want to call a bunch of lenders up to switch payment dates if I don’t have to. I want as less contact with the lenders as possible when taking over their loans.
Re: rent due on first in CA? - Posted by Dave
Posted by Dave on July 27, 2001 at 10:52:00:
I’ve never heard of any requirement in CA that rent is due on the first. Can you give details?
Re: rent due date - Posted by rita
Posted by rita on July 27, 2001 at 07:17:18:
How do you find out the laws and regulations for your state?