Rental tips: How to Ensure your Rent is Paid on Time

Rental tips: How to Ensure your Rent is Paid on Time

rental tips

Have you ever had tenants not pay rent on time? If you do manage rental properties, it’s important to communicate the priority of rent paid on time. Otherwise, you may run the risk of losing money. We share helpful tips for communicating rent expectations with tenants and backup plans if things go wrong.

As a member of the Property Owners Association of Queensland, I was amazed at how owners would come to a meeting explaining how their tenant was three or four months behind in rent. Owners were unaware as they had failed to keep track of rental payments. By then the amount of overdue rent was so large, the tenant could not catch up, their bond was exhausted, and they were just sitting there rent free until evicted. The eviction process through the courts can take some weeks.

As I own multiple properties, rent is adjusted for the first payment, so the rent is always due on Monday. Two days later, each Wednesday, I check all the rent and send a text if the rent hasn’t been paid on Monday. If they are more than seven days overdue, I issue an RTA form (Notice of Tenancy Breach). I prefer to deliver this to the tenants’ letter box, rather than post as posting increases the time required before you are allowed the next step, which is to issue the Notice to Vacate.

There are some reasons for choosing Monday. Firstly a lot of people are paid on the Thursday or Friday, and I find many of my tenants pay on their payday, in advance of the due date. However, the main reason is that when you issue notices for breach of tenancy, you must give a full seven days after the tenant is overdue. The notice then allows a further seven days to remedy the breach. Commencing on Monday, enables you to issue a second notice before the following weekend. This second notice is a notice to vacate within seven days. At this time, the landlord still has some bond remaining. My method minimizes loss of rent if court action to evict is required. More importantly, the tenant has to decide whether it is cheaper and less trouble to pay the rent owing, or to find accommodation elsewhere, without a landlord reference, and also to find the new rent in advance and a new bond.

I would suggest if you have only one rental property, and the tenant has regular employment, arrange for the rent to be paid on the day after their payday, preferably set up as a regular automatic payment and noted in your diary.

The important message is to let your tenant know payment of rent on the due date is priority to you. They will soon pick up if they miss a payment and you don’t notice. From my experience, where people can’t pay all their bills, they will pay the ones who have the worst consequences. Knowing you are vigilant of late payments is a good incentive to pay your rent on time.

When the tenant comes with a sob story, simply tell them you are their landlord and not their banker. If they can’t borrow from elsewhere, why should you take the risk. In my experience, the tenants who want to become overly familiar, and who have the best stories of wealth, are the ones to watch too carefully.

 

Disclaimer: Financial Mappers does not have an Australian Financial Services License, does not offer financial planning advice and does not recommend financial products.

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