Lease Purchase Clauses - Discounted Hire, Late Charges, Due Date
By: Micha K.
Submitted: 2010-07-20 05:37:22 | Word Count: 601
I've been a real property investor for over thirty years and I like promoting a home on a lease purchase.
Discounted Lease:
I give a $200 low cost for paying early or on time. Sound loopy would not it?
Here's my logic and particulars:
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The lease after the "discount" is definitely the market and advertised rent. For example: the market and the promote rent is $1000. My rental agreement says the lease is $1200 but, if the lease purchase tenant pays on time, there is a $200 low cost!
I've by no means had a renter object to this. Why would they? If they did, they're admitting they will pay late. The tenant now understands the penalty of not paying on time and also you, the landlord, do not need to spend you Time, Treasure and Expertise chasing the lease with out being compensated.
Late Fees:
My late price is due the day following the hire is due. I don't give a 'grace' period. What ought to I? I've learned over time, the renter's mindset is that the lease isn't due till after the grace phase. So, if the owner provides a 5 day grave interval, the renter thinks the rent is 'due' on the sixth.
Don't give a grave phase. The rent is due when it is due.
Additionally, do not be 'whimpy' on the late fee. If the payment is late sooner or later, I cost a 10% late charge and if not received within 5 days, I charge an extra 5% - a total of 15%.
I begin evictions when 6 days after due date.
Due Date:
My rents are due on the 25th of each month, not the 1st.
Two reasons I do this:
1 - my mortgage payment is due on the first and I want their lease to make the mortgage payment.
2 - As a result of my hire is due on the twenty fifth and never the first as all different landlords, I start the eviction process earlier than them and normally and get better service from the Justice of the Peace Court (quicker court date) and Sheriff (faster eviction notice delivered to tenant).
Some tenants will complain that they receives a commission on the 1st and the fifteenth and won't have the money until the 1st. I simply inform them to pay me on the 15th.
Explain to your tenants you begin evictions on the sixth day after the due date after which they can even be answerable for my courtroom price and there is a $200 reinstatement fee. That is for my time to file the eviction process.
Bottom Line:
Discount Rent: The lease after the low cost is the market and marketed rent
Late Charge: No grace period and cost the fee the day after the due date. Start eviction five days after the due date
Due Date: On the twenty fifth, not the 1st.
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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.
