Reasons Why Every Portland Oregon Landlord Should Charge Late Fees
In 2022, the rental market is more difficult than ever before, and many people have been paying their rent late due to Covid-19, job losses, and the recession and it’s not uncommon to hear of landlords charging late fees.
Sadly, some landlords in Portland don’t like to charge late fees because of the simple fact that they want to do right by their tenants.
This is completely understandable since the whole country has been affected by the Pandemic, but the reality is that not charging late fees hurts a landlord’s business.
If you’re a landlord who is on the fence about charging fees, this article will offer you several reasons why you should be charging late fees when your tenants pay their rent late.
Reason #1 – Nobody Likes Paying Late Fees
The first reason to charge a late fee is that nobody psychologically likes to pay a late fee.
This is true regardless of the industry; when somebody must pay a late fee, they feel that sting of having to make that late fee payment, and when it comes time to pay their bill or payment again, they’re going to be motivated to make that payment on time so that they can avoid having to pay that late fee again.
In some cases, a tenant may be fine with paying a late fee but, if you raise that late fee so that it does more than take a small bite out of their monthly budget, they will work extra hard to pay their rent on time the next month when it’s due.
Reason #2 – Help You Control Your Finances
Let’s face it, even though you may own one or more rental properties in Portland, the reality is that your finances are important too, and when your tenants pay late, you must pay your payments and other bills late as well.
To avoid late payments, and possibly damaging your credit, it’s vital to have late fees for your rental property business since those fees will essentially light a fire under the tenant and motivate them to pay the rent on time.
Reason #3 – Saves the Embarrassment of Chasing Down Tenants
Another reason to implement late fees for your rental property business is that the late fee will save you the hassle of having to chase tenants down to get them to pay their rent when they’re late.
Tenants who know that they will be stuck with having to pay a late fee will take it upon themselves to track you down to pay their rent on time, rather than having to avoid paying late fees which in Oregon can easily average 5% of the monthly rent.
Reason #4 – Helps Tenants Avoid The “Slippery Slope” Of Bad Habits
So far, we’ve offered you three clear reasons to consider adding late fees to your rental property business but another important reason to conserve late fees is that they help to stop your tenant from falling down the slippery slope of bad habits.
Unless it’s dealt with immediately, tenants who pay their rent late will continue to push the boundary of those late payments, and the next time that they pay late, they won’t think twice about stretching out their late payment much longer.
Reason #5 – They Do Their Part to Help Tenants
One of the best reasons to consider implementing late fees in your rental property business is tenants who fall behind on paying their rent have a far more difficult time catching up and, in some cases, once they’re two to three months behind, it makes it difficult to impossible for them to catch up on that back rent.
Knowing that they will have to pay late fees encourages tenants to stay on track financially and work hard at paying their rent on time.
Reason #6 – Tenants Will Communicate with Other Tenants
Last of all, but most important, the number one reason to consider implementing late fees for your rental property business is the fact that tenants talk.
This means that a tenant who knows that they didn’t have to pay late fees one time will share that information with other tenants to provide them with Peace of Mind knowing that should they have to pay their rent late, they won’t have to expect being charged a late fee from you.
Once you have more than one tenant who pays their rent late consistently, you can expect inconsistent cash flow and the possibility of losing thousands of dollars over the course of one year.
It’s best to take action now and consider implementing a late fee so that tenants know that should they pay their rent late, they will be expected to pay that fee in addition to the months’ rent that they owe.
How Much Should You Charge For Late Fees?
As we stated above, the average late fee that a Portland Oregon landlord charges is typically 5% of the monthly rent.
Ultimately, the late fee that you charge is up to you but, if you’re uncertain about the amount that you should charge, it’s best to consult with a local property manager because, a property manager like Rent Portland Homes – Professionals, can provide you with excellent service and great support for your rental property, including charging the correct late fees so that your tenants pay their rent on time every month.
Contact Rent Portland Homes – Professionals
At Rent Portland Homes Professionals, we specialize in local property management for single-family and multifamily rental properties in Portland.
You can count on our team of experienced property managers to provide you with the best service and support for your rental property, including charging the correct late fees so that your rent is always paid on time each month and deposited in your account.
If you’re tired of managing your rental property yourself, or if you’d like to learn more about our property management services, contact us today by calling (503) 447-7735 or clicking here to connect with us online.