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Getting rent paid on time

As a landlord, there is one thing you want above all else – the rent paid when its due. Luckily, the majority of tenants tend to pay their rent on time and when it is due.

Unfortunately however, the remainder, which is only approximately 2% of tenants, can believe it’s ok to pay their rent at any other time except when it’s due. This 2% can be extremely difficult to deal with. Our percentage of tenants in arrears is well below the industry standard of 2% – our daily rate is always below .05%, which is actually an exceptional figure.  

We believe that the effort we put into chasing the tenants who are in arrears, certainly helps with this result. But we also know that the effort we put into checking all rental applications thoroughly, also contributes to this low arrears rate.  Below are some of the items we have in place to help keep arrears under control and it all starts with the rental application. 

  • We don’t rent to a tenant who doesn’t have the capacity to pay the rent being asked.  For example, we have a rule of thumb that if the rent is more than a third of an applicant’s total income, the reality is that the prospective tenant will find it extremely hard to pay the rent.
  • As part of our sign up process, we make it very clear that ensuring rent is paid time is our No. 1 priority and if they are late there is a process we will follow until the rent is received. We also explain what the legislation allows us to do and what the consequences are if rent is not paid on the due date.
  • We are also members of TICA (Tenancy Information Centre of Australia), which means we check every tenant who applies for a property to see if they are listed on TICA’s defaulting tenant database and if they are, we recommend that the application is not approved. 
  • We follow a checklist at every tenant sign up, which includes providing every tenant with all information relating to how rent is paid and the consequences if they don’t. This checklist has a page of items relevant to renting a property and every tenant signs that checklist at the completion of the sign up process. It’s really important that we emphasise the importance of paying rent on time.
  • We use the One Rent payment system and this provides 5 rent payment options to all tenants. Sometimes tenants feel they can’t pay their rent if they are overseas or on holiday etc., but with One Rent our tenants can pay rent from anywhere in the world and at any time of the day. There is no excuse for not being able to pay rent on time, no matter where a tenant is.
  • We try to avoid individual rent payments when tenants are sharing. It’s much better for us, and also the property owner, if rent is paid in one sum, instead of trying to work out which tenant has paid their share and which tenant hasn’t.
  • In Victoria a tenant must be 15 clear days late with their rent before a formal Notice can be served. We always make sure the Notice is served as soon as possible as this is really important.  If the 15th day falls on a public holiday or weekend, it must be served on the first working day after that 15th day. Notices must be served by registered mail as well and we continue to work with the tenant to avoid this proceeding to VCAT. Sometimes that is just not going to work out the way it should.
  • We advise landlords that a lease agreement must not be renewed if a tenant has a history of late rent payments.  That’s simply condoning their behaviour and accepting that not paying rent on time is OK.
  • It’s important that when a tenant is in an arrears situation, that we do exactly as we say we will, otherwise they simply won’t believe that we’ll service a Notice, or proceed to VCAT.  If we say something is going to happen, we make sure it does. 

Unfortunately, it’s a fact of life that some tenants will fail to meet their obligation to pay rent on time and when it’s due. But it’s also a fact of life – in our world – that if they don’t pay the rent, they can’t remain in the property. 

If you are having trouble with tenants paying their rent late and your property manager is not chasing it for you, please feel free to contact us regarding your needs at jan@investorsdirect.com.au

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Investors Direct Financial Group

Investors Direct Financial Group (IDFG) was established in 2001.
Our mission is to help our clients achieve and maintain their financial freedom.

Members of the IDFG Group include:
  • Nanmon Financial Services Pty Ltd, trading as Investors Direct Financial Group (ABN: 52 097 697 820 ; ACL: 402950)
  • ID Property Advisory Pty Ltd (ABN: 69 141 716 412 ; Real Estate Licence: 071792L)
  • Investors Direct Financial Planning Pty Ltd(ABN: 50 141 139 228 ; AFSL: 385827)
  • Investors Direct Property Management Pty Ltd (ABN: 59 153 184 859 ; Real Estate Licence:073458L)
  • 8 Star Homes Pty Ltd (ABN: 83 135 066 876)
  • Investors Direct Financial Services Pty Ltd ACN 608 410 591
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