The Successful Landlord Blog

This is a guest post by the Calgary mortgage specialists at the Purcell Mortgage Team.  For mortgage related tips and tricks, check out their weekly-updated mortgage blog.

The real estate market has had its ups and downs, with the end result being plummeting rents and massive foreclosure rates.  For the savvy investor, this also means sweet deals on respectable properties.  This, of course, leads us to the question of the hour: should you pay off the mortgage(s) on your rental properties, or do you leverage the equity you’ve built in them to purchase new ones?

Understandably, it’s a tough call.

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So, recently I had the realization that the late fees I charge tenants are obviously not high enough. I have a few tenants who consistently, every single month, are late on their rent.

Of course, the reasons range from car trouble to an occasional dead grandmother but that’s irrelevant. The point is that these people are obviously living month-to-month and do not keep any money in reserve for “emergencies.”

The standard terms in my leases are, “…rent is due on the 1st of the month and late on the 4th…” Additionally, “…late fees are $25 on the 4th and $5 per day after that.” So, basically, if a tenant is 1 week late with the rent, it will cost them $55 extra for the month. I guess $55 is not a lot of money these days and the tenants see this as “no big deal.” Read the rest of this entry »