While there are many financial benefits to owning a rental property, there are also headaches and risks. Tenants can fail to pay rent on time or skip a payment entirely. A common question a landlord wants to be answered is how much can you charge for late rent?
To answer this question, the landlord needs to know what the common practices are to create their own policies. Most landlords charge a late fee between $25 to $50, but you should look to see what the state laws are for your given location. Tenant properties in multiple states may have different late fees to comply with local laws. Some landlords offer a grace period usually between three and five days after rent is due. This grace period incurs no late fees. However, once the grace period is done, a late fee is charged. It is wise to stay under 5% of the total monthly rent for the late fee.
The experts at https://www.rentrescue.com provide tenant default protection along with the legal resources necessary to evict a delinquent tenant. The income protection is paid by the tenant as insurance in case they abandon or are unable to pay.
Understanding how much you can charge for late rent can ensure you comply with state laws. Include this information in the lease, so the tenant is aware of any fees.