As a landlord, you are bound to face the reality that your tenant may not always pay on time. If you are depending on that rental payment to cover the mortgage payment on that property and you receive the rental payment late, then your mortgage payment may be late as well.

But don’t fret, here are a few things you can add to your lease agreement to encourage on-time payments and discourage late payments:

• Include an early-bird discount. For example, if your lessee pays 5 days before the payment due date, knock off $50.00 as a discount.
• Include a late fee amount. No one wants to pay extra for being late. How much should the late fee amount be? You could make it similar to the amount the late fee would be for the mortgage payment.
• Include a 5-Day Pay Or Quit clause. This is actually the start of an eviction process, but making sure that the tenants see the clause in agreement may discourage them from paying late.

Your tenants should also know that on-time or early payments will be noted by you, should they ever need a future reference.