Month: September 2023

Vacations & Their Cost

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Here’s an unpopular opinion: you don’t need to buy all the amenities to have a good vacation.

Our financial advisor has a saying in his family, “we can’t afford ice cream.” If they wanted to, they could clearly pay for their family to have an ice cream night on vacation. However, they choose not to spend their money in such a way for the sake of the big picture.

The point I’m trying to make here is that you need to stop and think about an expense. I can’t remember what the item was, but when I went to pay for it, it was $8. It’s not that I couldn’t afford to purchase something at $8. It was simply that this item was worth $2 to me. The value of it was not $6 more of my money.

This post (or rant) started because of this Facebook post that was made in a local mom’s group. Apologies for the large image, but you couldn’t read the numbers until I got it this big.

Quite a few people echoed my point – stop with the add-ons. You can have a great day without the additional amenities/activities, and without the all day dining options. We had a season pass to the Cincinnati Zoo. We ate before we entered, packed snacks, and then ate on the way home if needed – at McDonald’s, with deals (we lived over an hour away from the zoo, so sometimes we couldn’t plan it to have only one meal while out). At a similar place to Kings Island, I know people who have packed coolers and left them in the car because you’re allowed to exit and re-enter.

Not buying extras holds true for any event. Your kid doesn’t need a $20 light up wand, that will be promptly forgotten about at the 48 hour mark, at Disney on Ice. The show itself was exciting and a “treat,” so let it stand alone. Your kid doesn’t need a $15 ice cream at the theme park. Simply let them enjoy the experience without developing a sense of entitlement or expectation that they’re going to get a “treat” every time you’re out.

I completely understand the mentality of “go big” for vacations because it’s a special time. But what is that worth? I know some people spend all year saving up to go to Disney, and they want the “full” experience. Disney itself is very expensive, but then you start spending on gift shop paraphernalia and food in the park, you’ve now spent a small fortune for hours of entertainment.

DISCIPLINE

Instead of only being disciplined for those few days per year, focus on the question: what is each individual dollar worth? I have an entire post where I share the thought process and conundrum I faced for purchasing a $4 weighted tape dispenser. Seriously. While you’ve “saved” for this vacation, what if that saving mentality helped you be able to pay your regular bills along the way? Or what if instead of spending extra money on vacation, that money went towards paying for school supplies? It’s all about creating the mentality and discipline to ask yourself what the value of something is, both to you and to the economy – if you’d pay $2 for a water bottle outside a stadium, is it worth paying $6 inside the stadium? Or could you plan ahead and bring your own water?

This irritation isn’t only for vacations. A friend of mine would leave their house to go to a nearby gas station to buy gatorade and soda bottles. You were at home! If going to the gas station is a regular occurrence, and you enjoy drinking soda out of a bottle, why don’t you get a multi-pack and keep it in your refrigerator? Then there’s the person I used to live across the street from who would order door dash regularly. It probably averaged to once per day; some days there was two deliveries, and some times she may skip a day. Then she posted a GoFundMe for help to pay for her tuition and books to finish her RN. She also posted all the amazing toys (excessive and expensive) she got her kids for Christmas, while also complaining about her son’s behavior being out of control, and that her daughter was being so bad that she got tv in her room taken away – wait, why does a THREE YEAR OLD have a tv in her room? So tell me again how you can’t make ends meet, and how you need help finishing your degree, while you have zero discipline on spending the money you do have. Why is it everyone else’s problem to fix for you when you’re putting no effort yourself? I’ve digressed.

OUR RECENT TRIP

We just went on a trip to Jellystone. My son had asked to go back to a cave since we left a cave last year. He’s obsessed with space and Earth. He was 4 at the time of this trip. For 2 adult tickets, all 5 of us were able to take a 2-hour tour at Mammoth Cave (children 5 and under are free). That was $40 worth of entertainment. I figured it was a good time to take advantage of their pricing structure before it would become $60 next time we’d try to go. While I felt the $40 was worth our time and money, I mildly regret it. His excitement for the caves was worth it, but we missed out on activities at Jellystone that I think they would have enjoyed. At 4 years old, we could have easily skirted the cave desire because he doesn’t know that a cave is 20 minutes away when we’re at this location.

We paid $433 for a 4 bedroom cabin for two nights, and that included a $50 charge for bringing a pet. We packed all our food for all the meals. My choice to allow the kids to stay up way past bedtime and for the two older ones to share a room cost us on day 2; I promised them ice cream if they powered through the cave, so that was $14 for all of us to have ice cream, which wouldn’t typically be an expense we incur. Other than the cost of gas to go 260 miles roundtrip, we spent nothing else.

There were opportunities to pay for things. We could have rented a golf cart for $70 per day. We could have paid for the mining sluice, which didn’t have a price advertised, and would have been 3 minutes of entertainment. We actually did try to do their obstacle course, but none of our kids were tall enough. Instead, we took advantage of their amenities. We drove pedal cars, played at their numerous playgrounds, went swimming, went to their beach to play in the sand and swim, ran around the splash pad, did their craft times, attended their character greetings, played bingo, played minigolf. We probably just sat at the cabin for a total of 3 hours between 3 pm check in on day 1 and 11 am check out on day 3; we even let the kids stay up until 8:30/9 (their usual bed time is 6:30).

UPCHARGES

So let’s look into amenities at GWL. I’m going to look at Mason, OH’s location. First, because it’s the one closest to me, so I’m familiar with it, but also because whenever there’s a Groupon for $99 nights, Mason is always $149. That tells me that Mason’s probably on the middle-to-higher end of amenities and their cost.

For a weekend in October, my room options range from $410 to $1035 per night. They provide a rate calendar option for you to see the rates on other nights because you may feel that $1035 for a night in a water park and hotel is absurd (I hope you do….). I also encourage booking with a code (there’s a Facebook group that shares active codes for deals), using a Groupon, or planning in advance and being flexible on dates.

You select a room option (I picked $410), and then it offers you a late checkout option. Check out is 11 am. For $50, you can stay in the room until 2 pm. What are you going to do with your room between 11 am and 2 pm? When this option is presented to you on the screen, what are you thinking? Are you thinking it must be a necessity because it’s being offered? Are you thinking that it’s needed because you don’t want to “leave” at 11 am? Or are you really thinking about the cost/benefit ratio of this charge? Are you expecting to be done with the water park for the day at 1:30, so you’ll go shower and change before the 2 pm check out? If I’m spending the day at the resort, I don’t see where I need the room between 11 and 2. I have one exception, which is very specific right now. If I hadn’t just paid $400 for a night there, I may consider the upgrade because we still have a napping kid from 11-1, so that could be helpful, but that’s not worth the additional $50 to me, personally.

GWL does a good job at pushing their pass options. There are 3 levels, ranging from $50-70. The options include a variety of: MagiQuest, Build-A-Bear, Mining Sluice, mini golf, bowling, GWL goggles, $5 to the arcade, candy, and an ice cream. Purchased individually, the price for the pass is a better deal by a few dollars than if you purchased these individually. However, do you have the time to do ALL of these activities and enjoy the water park? If you’re staying one or two nights, you likely don’t have the time to get the most out of everything. Don’t forget that they offer several ‘free’ activities (e.g., yoga, character greetings, bed time story, crafts, etc.) each day as well, not to mention that you’ve just spend $400 on the stay to play in the water park.

Don’t forget that on top of the room rate, there are taxes and a resort fee. If I wanted to stay for two nights with 2 adults and 3 kids (even though one is less than a year old), with no extra purchases, my total is $1,023.70. That’s $820 for the room, $124 for taxes, and $80 for resort fee.

These options that are presented don’t even include all the options you can pay for. For instance, you can rent a cabana. You have to call to book it, but I’ve seen it priced at $200 and at $500 for it. It’s not private. It’s not secluded. It’s not secure for your belongings. Make sure you ask yourself what you’re getting for that cost and if that money could be put to better use.

As a kid, we used to go to Lake George. We joked that it was our vacation from our vacation. The point of Lake George was to do nothing. You played in the pool at the hotel, walked the town, and got ice cream each night. It was relaxing. I remember lots of our trips, but Lake George sticks out as a favorite. Even our trips that were busy – it was busy because we were sightseeing and driving far; it wasn’t busy because we were paying for activities and trinkets.

We went to Disney on Ice, and my son still thanks me for the experience; he didn’t get any trinkets while we were there, and he still loved the experience. Your kids will remember the time they spent with you. That’s the point of the vacation – spending uninterrupted time with your family, not making it an exhausting, jam packed few days where kids are overstimulated and sleep deprived.

This isn’t a parenting advice post. It’s simply a moment to stop and think about your spending. Take the time to determine whether a dollar spent on an activity is worth that dollar’s cost in your day’s/week’s/month’s/year’s goals. The tape dispenser. Truthfully, I didn’t know it only cost $4. Regardless, I still took the time to consider whether buying this thing that I need for 1-2 days per year was really worth spending our money on, or could that money be put to better use.

In 2021, we purposefully took trips each month. We had looked into buying a vacation home, and we decided that we’d rather go to different places each trip than the same place over and over. The mortgage was going to be about $1200, so we allocated that much as our trip budgets. In May, we spend $618; June was $200; July was $690; August was $1069. I say this for perspective.

Take the time to analyze the spending that you’re doing, independent of the deals being offered. Will that one trip be worth the cost of it? Will the money spent for that trip be worth anything that you may have to give up to make that trip happen?

House 4 Turnover

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I share these turnover stories for both sides. I want to show landlords that others go through what they go through. I also want tenants to see that if you communicate regularly and are up front, a landlord can work with you in nearly every situation. It’s the surprises that landlords don’t want to manage. I think back to my time as a teller in a bank – if you were nice to me, I had leeway; if you demanded action from me without any polite undertone, I knew every single rule that there was.

We bought this house in June of 2017. We had to put a little bit of work into it, and we had it rented in September. That tenant needed to break the lease early, but she had a family member who wanted to take over the lease. She passed the background check and moved in mid-July of 2018. She’s lived there ever since. Her lease renewed on an annual basis, July 1 through June 30. She rarely asked for anything, kept up the house as if she was going to live there forever (at least as of my last inspection), and was friendly. 

In February, she messaged us that she’d be leaving the house as of April 30th. Even though her lease went through June 30th, she had given us plenty of notice, and a May rental is easy enough to get rented (we typically see less people looking for a lease in the Fall and Winter), so we went with it.

Shortly before she let us know that she’d be leaving, I had an old tenant ask if we had something available. We didn’t, but once she gave notice, I messaged the old tenant back. We ended up going through the process of screening the person she had interested (a friend of her’s) and approving him. Not having to list the house for rent, show the house, and then review several applications is a positive.

TENANT NOTICE

Not that this matters now, but to share how people act, I’m going to include this story. Be a nice person. Be a straightforward person. Take responsibility for your actions. Skip this section to get back to the actual turnover work we did.

On February 7, she said she would move out on April 30 and will leave the house “in impeccable condition ready for the next tenant.” It was understandable that she needed more space, and she shared that she had secured another place already. She stated she’d send a formal letter, but that never happened. She also shared that she will leave a shed she had purchased, and that she already had paint on hand to give the walls a fresh coat.

On March 13, she shared concerns about the house that we should address (according to her) before another tenant moves in. She again stated, “the house [will be] spotless and freshly painted and the grass will be mowed.” She said the house needs a power wash, windows replaced, and the bathtub resurfaced. Then the fun. She changed the lock on the yard gate, and she hadn’t told us until now. She said she replaced the lock on the back door because she “was burglarized twice.” The house gets broken into and you don’t think to let your landlord know OR to let them know you changed the lock??

Here’s the next kicker. “I officially move into the new house on Wednesday, but I’ll be taking the extra time to get everything moved and in order for the [current] house.” That “Wednesday” would have been March 15.

There was a lot more back and forth, but we communicated through my property manager at this point because my property manager was handling her husband getting in there to get some work done. We were told that we could get in to start work before the end of April so that we could rent it right away.

Then comes April 19. “I had to push back the date to give a key for the contractor until .. the 26th.” Then came all the stories. Guilt inducing stories. She also stated she was about 80% moved out. She said “everything will be ready by my move out on the 30th.” So I laid down what we were told at that point. We had been told (either through our texts or through my property manager) of several “move” dates. Now we’re told she’s not out and has no intention of letting us see the property, let alone get work done, which is what we agreed to previously.

I politely stated I had concerns. I went into the background of who these people are that are “working” for me, and that they’re friends. I tried to ease her feelings of a random man entering the house (that she had told us she had moved out of on three different occasions). My biggest issue at this point was having a new tenant commencement date. No, I don’t need access before the end of your lease, but that’s not the expectations that were set. So I made future plans based on the agreement we had. If the house wasn’t going to be ready, I needed to line up contractors for the first week of May. I wanted to know the needs now, not on April 30th when no one is available for weeks.

She had said she was going to paint, but it was clear that her timeliness was not in line, and that this would fall on me. I said “You had mentioned that you would repaint the walls before the end of April. That was very generous of you, but it’s not required. However, if you won’t be painting the walls, I need to know that now because I need to get a painter scheduled basically today to be able to have him there on May 1st.” She double downed that the house would be painted.

I also was upset that she changed the locks without telling me (a lease violation, as well as a common sense violation). Had I known and been provided a key, then I would have already given my property manager the key. Instead, she’s holding the key hostage because she doesn’t know MY property manager, and that was unacceptable.

On April 23rd, she told me that no one was to do work on the house until after her lease was over. I was too frustrated to provide pleasantries at this point. I said “I explicitly asked the status of that.” And I said “you said we could be in after Wednesday and that May 1st wouldn’t be an issue. I was trying to prevent exactly this situation – a last minute surprise that affects our schedule/business.” More excuses. And I do understand that people who hand out excuses like lollipops in a doctors office don’t realize that’s how they’re acting, but it’s quite frustrating being on the receiving end of an endless list of excuses that are meant to cause guilt.

My handyman went over there on April 26 and took pictures of two rooms (it’s a two bedroom house…) with stuff packed to the ceiling. And then she shared that she forgot about things in the attic during the final walk through. “80% moved.”

We ended up pushing the new tenant to May 5th as the move in date. Had we kept it on May 1st, we would be liable for “damages” in some way by not providing him a place to live on the commencement date. So we quickly got a new lease signed with a commencement date of May 5th.

TURNOVER WORK

We had the entire house painted. There were an obscene amount of decals left on the walls that had to be removed. They had been on too long, and the paint came with the pieces or it left indents, so they had to be sanded down. Then there were also an obscene amount of command strips all over the walls that had to be removed, and the walls repaired because they were knock off command strips and not the real ones that actually come off easily. Since the house was beige and needed so much prep work for painting, I decided to just change the color. Our handyman had to do all the prep work and then do two full coats of my light green color on all the walls.

On top of painting all the walls, he had to fix some of the trim. My tenant decided to [poorly] paint SOME (not all) of the trim black. Doors were painted black, trim was painted black. It was not good. So I then had to pay for 4 coats of paint on the trim work to get it to white. It was originally the same beige as the walls, so for $3,500, the house now has all white trim and a pretty light green wall color, which probably brightened the space nicely.

When we bought the house, the tub had been painted and started peeling. It wasn’t something we had the expertise to manage. The tub was original (read: cast iron, heavy), and the paint wasn’t horrible enough to warrant immediate action. We covered the main issue with a mat in the tub, but over the last several years, it wore away. We had our handyman epoxy bathtub. While he was at it, he also epoxied the walls to cover the blue tile. I didn’t hate the blue tile, but someone at some point had repaired the wall by the toilet, and then replaced the blue tile with white/beige tile.

That’s what it looked like when we bought the house, and this is what it looks like now. The decal on the toilet is icing on the cake for this saga.

Then there were random little tasks that my handyman had to do, like replacing door knobs that had been removed and scraping the paint off my brand new windows. He also had to change the locks on the house because we think she kept helping herself back into the house, and we had to change the lock on the laundry room door because she couldn’t find the key.

SECURITY DEPOSIT

In Virginia, I have 45 days to return the security deposit or share the charges placed against the deposit. I learned early on to take the full 45 days because tenants don’t provide their final utility bills (as required by the lease), and so I don’t want to return the security deposit only to find a surprise utility bill 30 days later. So while I knew the charges by the end of the first week after this tenant vacated, I waited to ensure no surprises popped up.

In my disposition letters, I reiterate the lease agreement terms, including the amount of security deposit that was held from the beginning of the lease term. In this case, I reiterated that her lease term went through June 30th, even though her notice was given through April 30th. I also shared that the itemized list I provided doesn’t include items that I couldn’t fix yet or that I hadn’t fixed yet (e.g., stickers on the once-brand-new vanity, spray foam on windows, and the lack of proper yard maintenance). I also stated that we had days of lost rent due to the condition of the house when it was vacated, which she isn’t charged for. With all those caveats, the total still came to about $2,800. The security deposit I held was $945. This left a balance of $1,937, which I chose to not pursue collection on.

I have not heard from that tenant since the letter.

NEW TENANT

The first tenant ever had contacted me and asked for a place for someone she knew. I didn’t have one at that moment, but this house came available shortly after that conversation. I sent the background check to the new person, and he passed everything. We had agreed on a May 1st commencement date. I had some delays with the passing of my mother, but then I gave the new lease to our property manager. The new tenant dragged his feet on getting it signed, which was a red flag. He struggled with getting the first month and security deposit funds together, which was another red flag since he had two months notice for this agreement. Luckily, there have been no issues since we got everything squared away on May 5th.

When we first started renting this house, the goal was 1% of the purchase price as monthly rental income. This would equate to about $650. However, the market rent at that time called for higher, and we had rent set at $795 from 2017 through 2023, never having raised the rent on the tenant. With the drastic increases in property values, therefore causing increases in my taxes and insurance bills, rent was now set at $925. Had I listed the house for rent, I would have listed at $950. Since this was an “off market” agreement, I was comfortable with a rent reduction.

SUMMARY

All in all, this was an easy turnover. Having the contacts of a handyman is greatly beneficial at this point. For a small house that’s under 900 square feet, we spent a lot more than we typically would for turnover. We project turnover to cost 10% of the annual rental income. In this case, that would have been under $1000. However, we didn’t have to turnover the house for 5 years. That’s about $5,000 had we turned over the house every year. So the total bill coming in at just over $3,800 essentially says we’re still “coming out on top.” It also provided us an opportunity to increase rent closer to market value. We’re 4+ months into this tenant’s tenure, and all seems well.

September Financial Update

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RENTAL FINANCES

It’s the calm before the storm with rental payments. We’ll owe multiple jurisdictions’ tax payments over the next month. We only have 5 houses with an escrow account, so I’m responsible for insurance and tax payments on my own. I don’t mind it because that means I don’t have to keep money tied up in an escrow account balance, but it does mean that there are large outlays multiple times a year that need to be properly accounted for.

I recently made a post about late rent payments this month. The one who I continue to charge late fees didn’t even pay on the day they said they would. I despise having to hunt tenants down for payment. She emailed me that “September 5th payment” would be late (ugh … it’s due on the 1st, maybe plan for that day instead), she said it would be paid on the 8th. I had to ask on the morning of the 9th where the payment was. I was giving her a few hours to respond and planned to send a notice of default. Lucky for them, I got distracted and busy, and I didn’t get around to it. They finally responded Saturday night that they had lost power and were distracted, but they sent payment then.

I paid out the invoice from our handyman that I had been waiting on, which was $810. I had mentioned that I’m waiting for an invoice from our HVAC guy, but I think he’s not charging me for the service since he had to go back after installing a new condenser. I’m STILL waiting on the roofer to complete the job on one rental. I signed the proposal on July 5th. He finally started the job at the end of August, but decided to change my scope of work without approval. That delayed the project another week. Then I have no idea what has happened over the past week and a half, but supposedly it’s finally done.

A plumber came out for a hot water heater issue at one of the properties. The tankless water heater wasn’t powered on. I don’t even know how that happens, but it seems like something that may become a bigger issue. The company even said they don’t service or work on electric tankless water heaters, so I don’t even know where we would go from here.

PERSONAL FINANCES

In my last financial update, I mentioned that our insurance adjuster had finally came out, three weeks after the tree falling on our deck. He took a week to get us the estimate. We then responded the next day with all the errors and omissions in the estimate. It then took 3 weeks for our email to be acknowledged (even with multiple phone calls). We finally escalated this two weeks ago (State Farm doesn’t make it easy to escalate beyond your desk adjuster answer the phone), had an estimate redone by our adjuster (supposedly) about 12 days ago, who then told us the supervisor approval process would be 3-4 days. Giving the holiday of Labor Day and benefit of doubt, we didn’t push it until Monday, hoping they’d do the right thing and get us information. Mr. ODA saw that we had been reassigned a field adjuster on their portal. So guess what? For an event that occurred over 10 weeks ago, we’re starting over! Lovely.

I paid the kids’ tuition for preschool late. Luckily there’s no late fee charged. The school “opens” links each month. I tried to pay it around the 20th of August for September because I knew the last two weeks were going to be crazy with visitors. When I couldn’t pay it that day, I completely forgot about it. I was part of the “hey, you didn’t pay” email from the director – so embarrassing. Our oldest is going 5 days a week, so now his tuition is $350 per month; our second’s tuition is $175 per month.

Our 0% introductory interest rate on our credit card we opened 15 months ago expires at the end of this month, so that’s over $5k that needs to be paid. Then our credit card statement balance owed on our regular card is about $4,800 because of large rental property expenses. I haven’t paid it yet because I need to transfer money from savings, so I’m waiting until the last minute to do that so we can earn interest on that amount.

NET WORTH

Nothing too exciting to note here. Credit cards are still high, but that will be significantly different next month with our 0% interest card being paid off.

I asked Mr. ODA for his 401k updated amount yesterday, and he made a comment that I should wait to update until today because the market went up yesterday. I had already done the majority of the work, but an ailment and children meant I didn’t get to posting yesterday. So this morning, I updated just our investment account totals to see the difference. The chart above is yesterday’s numbers. Today’s 401k, IRA, and taxable investment account totals are $10,000 higher today than yesterday. That means that if I had updated the numbers today instead of yesterday, we’d be showing an increase in net worth from last month’s update by about $6,000. Instead, I’m showing a slightly lower net worth by about $4,000. It just goes to show how much the market can affect the numbers on any given day, and my net worth in trending generally upwards, but it may not seem that way because of one day’s market closure.

Late Rent

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Rent is due on the 1st of every month. There’s a grace period until the 5th. (Aside: I find it frustrating when someone says to me “rent is due on the 5th”) At 12:00 am on the 6th, rent is considered late. At that point in time, there’s a late fee applied to the amount owed. Typically, the late fee is 10% of the monthly rent. If your rent is $1000, then your late fee is $100. Legally, with no rent paid by the end of the day on the 5th, I can send a “notice of default” letter. This letter states that you have a certain amount of days (varies by state and/or local law) to pay rent, or I’ll file for eviction. Rarely, do I get to this point.

LATE FEES

There are two schools of thought (well, maybe more, but these are the main two I’ve dealt with). First, a late fee is free money. We had a handyman who was showing us a portfolio of houses say, “go ahead and let them be late; that just means more money for you.” Second, I wasn’t planning any of my finances on collecting late fees, so why collect them? This is the one I follow most of the time.

Sometimes, I feel that a late fee is a lesson. I typically follow through on charging a late fee if I had to “hunt” someone down to pay their rent or if they’re perpetually late and ignore that a late fee is owed when late.

RENT INCOME MANAGEMENT

I have 13 rental properties to manage. Each month, I record all the rent I collected with the date it was collected. I then do a simple “SUMIF” function in Excel to add up all the rent collected and attributed to each month, which I then compare to the total amount of rent I expected to collect for the month. This is how I manage who has paid and who hasn’t, and whether anyone is owed a letter of default (a letter stating rent is late, and if it’s not paid in X amount of days, I’ll file for eviction). I’ve had two tenants who were regularly late with zero communication, so I automatically sent the letter first thing on the 6th. More often, I have tenants who tell me that they’ve had some struggle, and they
1) Request a delay in rent payment;
2) Share their plan to get caught up (e.g., I’ll be able to pay $600 today, and then I’ll pay the remainder on Friday); and
3) Offer an apology.

If you communicate with me before the 6th, there is a 0% chance that I’ll be sending a “notice of default” or filing for eviction. Now, if you say you’ll pay by the 10th, and then you don’t pay and there’s no communication, then there would be a letter at that point.

If you communicate with me before the 6th, you’re not typically late with rent, and you have a plan to get caught up, I won’t charge the late fee. I have a chance to make someone’s day. In their head, I’ve “saved” them money at that point. Nearly all of my tenants are living paycheck to paycheck. If they’re late, that means they’re already worried and juggling bills. I don’t want to saddle them with another $100+ worth of a bill.

With that said, there are times that I stick to the late fee. I have a tenant who didn’t communicate up front, and then still had to be asked when we should expect payment. I held tight to a late fee on that one. I want it to be known that there are consequences. I can ease up on any future need for a late fee, but I’m setting a precedent there. If you don’t communicate nor pay rent, there’s a hefty consequence. In this case, it was $160.

THIS MONTH’S LATE PAYMENTS

Note that the 1st fell on a Friday. In these cases, I expect to see rent paid very timely. When the 5th falls on a Friday, then I expect to get the majority of my rent on the 5th. If the 6th is the 1st Friday, then I expect to receive a higher-than-average amount of late payments, and don’t charge late fees.

As I mentioned, I have 13 rental properties.
– I had 5 houses pay all or partial rent before the 1st of September (this is very unusual).
– I had 2 houses pay full rent on the 1st, and 2 of those who had prepaid rent paid the rest owed.
– I had 1 house pay full rent on the 3rd.
– I had 2 houses pay full rent on the 5th.
– I had 1 house pay partial on the 5th, with the intent to pay the rest on the 9th.

That leaves 2 houses that haven’t paid anything.

Here are texts or emails I’ve received.

  1. Good morning! We had a change in pay dates which of course affects everything. Can I pay $750 today and the remaining $1000 on Friday? What will the late fee be?
  2. I hope you’re doing well. I was wondering would it be okay if I paid rent on the 8th? …doc appointments have been a little more pricey than anticipated.
  3. Good evening, Sept 5th rent will be a few days late. We will have it to you on Friday 9/8/23 along with the late fee. Sorry for the inconvenience.

For the first two, I won’t charge a late fee. In #1, I let her know that it wouldn’t be an issue. I appreciated the advanced notice. She’s been late once before over 17 months, so it’s not a common occurrence. In #2, she’s been late once or twice before, but has always communicated well and is taking care of the house. I note though that I don’t expect tenants to share personal, health related information with me, but this is typical conversation with this tenant.

In the 3rd, this tenant will pay the late fee. Notwithstanding the “Sept 5th rent” part ;-), this tenant is routinely late. We’ve made excellent progress in the communication side of things though. Now I get an email that lets me know when rent will be late. Their routine late payments led us to change their lease set up. Their lease was $1450 per month. We offered them the chance to pay twice per month, $750 each. This would allow them to pay more related to their paychecks. Yet 5 of this year’s 17 payments owed are still late. They don’t take care of the property, and they don’t communicate well. We attempted to remove them from the house by drastically increasing their rent, but they accepted the increase. Since the change to rent being owed twice a month, their late fee is only $75 per late payment, instead of the $145 it could have been if they couldn’t pay every month in full.

SUMMARY

The original point of this post was to share that having multiple properties provides a luxury to allow for late rent payments without the collection of late fees. Outside of any abnormal maintenance charges, I owe 5 mortgages each month, totaling over $4,600, and property management fees worth over $700. I need 5 of 13 houses to pay their rent for me to cover those expenses. Note that this doesn’t mean the remaining 8 houses are all income for me; I still have other expenses in property management each month.

If you have to pay rent late, your landlord will appreciate anything you can put towards rent at that point in time. I shared with a tenant once that if they could pay something, that’s better than nothing because I still have a mortgage to pay, even when they don’t pay rent.

Understand that there are due dates and consequences for missing due dates all over life. If you don’t pay your mortgage by the due date, there’s a fee. There may even be larger consequences like losing a promotional rate. Similar with a credit card. There is interest accrued on credit card balances, late fees for lack of timely minimum payment, and the possibility of losing any promotional opportunities given.

Charging a late fee is completely within my legal ability, but I also understand that issues come up and that my tenants are humans. I’m not here to take advantage of them, so if I can “throw a bone,” I like to be that bright light in their day, especially when they were probably so timid about even sending the notice that they’d have to be late.