Posted by Jim IL on April 18, 2000 at 20:39:32:
Thanks for the compliment.
The good news is that I learned this HARD lesson right in the beginning of my REI carreer. (and it did not cost TOO much!)
Sadly, I do still have a tendency to be soft with some tenants.
I have one tenant that pays EVERY SINGLE month late, and always at least by a week.
I was about ready to NOT accept there rent any more and evict them.
Then, we had a talk , and I basically told them that they will NOT be able to exercise the option to buy with this payment history, and that the LATE FEES would NOT be waved. I also told them that I was being a “nice guy” and allowing them to stay and would consider the option still good IF they started to pay ontime. (They have not!)
Now I look at the deal this way;
Let them pay late EVERY month, since they do pay the rent, PLUS the late fee!
And, since they will in all likelyhood NOT be able to exercise the option, my profit goes up there as well.
I can do this all over again with a new T/B’er this summer.
This late payor can come up with some serious CASH to extend, and I may think about giving them a second chance.
That late fee cash flow is something I am getting rather used to. Õ¿Õ
Especially since I charge 10% of the rent amount, PLUS $5/day for a late fee. (think about that when the rent is $1k and they pay on the 10th or later each month!)
And, my payments are not due on the seller financed note until the 20th.
Gotta love this game,