I have been an actual estate investor for over thirty years and I really like selling a home on a lease purchase.
Discounted Lease:
I give a $200 discount for paying early or on time. Sound loopy doesn't it?
Here's my logic and details:
The hire after the "discount" is definitely the market and marketed rent. For example: the market and the advertise hire is $1000. My rental settlement says the hire is $1200 however, if the lease buy renter pays on time, there's a $200 low cost!
I've never had a renter object to this. Why would they? In the event that they did, they're admitting they'll pay late. The tenant now understands the penalty of not paying on time and you, the owner, do not need to spend you Time, Treasure and Expertise chasing the hire without being compensated.
Late Charges:
My late charge is due the day following the lease is due. I do not give a 'grace' period. What ought to I? I've discovered through the years, the renter's mindset is that the lease is not due till after the grace phase. So, if the landlord offers a 5 day grave period, the renter thinks the rent is 'due' on the sixth.
Do not give a grave period. The lease is due when it is due.
Additionally, don't be 'whimpy' on the late fee. If the payment is late in the future, I cost a ten% late charge and if not acquired inside 5 days, I charge an extra 5% - a total of 15%.
I start evictions when 6 days after due date.
Due Date:
My rents are due on the 25th of every month, not the 1st.
Two causes I do this:
1 - my mortgage fee is due on the 1st and I need their lease to make the mortgage payment.
2 - As a result of my rent is due on the twenty fifth and not the first as all other landlords, I begin the eviction course of before them and often and get better service from the Justice of the Peace Court docket (faster court date) and Sheriff (quicker eviction notice delivered to renter).
Some tenants will complain that they get paid on the first and the fifteenth and will not have the money until the 1st. I simply tell them to pay me on the 15th.
Explain to your tenants you begin evictions on the sixth day after the due date and then they can even be responsible for my courtroom price and there is a $200 reinstatement fee. That is for my time to file the eviction process.
Backside Line:
Low cost Rent: The rent after the discount is the market and advertised hire
Late Price: No grace period and charge the charge the day after the due date. Begin eviction 5 days after the due date
Due Date: On the 25th, not the 1st.
http://realestateformsforinvestors.com/Articles.htm
Author Resource:
W. Lewis Burger CCIM, has written many articles on real estate investing and self directed IRA's The forms and agreements on http://RealEstateFormsForInvestors.com were developed using this experience and hundreds transactions. These forms and agreements are very detailed and strongly favor the landlord. If you are looking for a simple and cheap one or two page documents that are not written by an experience investor, do not visit my site. However, if you are serious real estate investor, don't want to get screwed by your tenants and willing to pay for my mistakes and experience, then my site is for you.
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