All Topics / Help Needed! / Late with the rent!!

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  • Profile photo of Elysium-MElysium-M
    Member
    @elysium-m
    Join Date: 2003
    Post Count: 259

    Hi guys,

    I’ve just got my first tenant in one of my properties. He’s paid the first 4 weeks’ rent with no hassles.

    The next rent payment was due this Monday, and it ain’t in my bank account (he’s meant to deposit the rent himself – I thought this would be easier than asking him to send me a cheque or getting my PM to collect the money from him and then deposit the money into my account).

    I’ve got a question for all you experienced landlords and PMs out there – how late is too late?

    A few more facts:

    1. the property is out in the country, so I can’t exactly drive out there when I’ve got a few spare minutes.

    2. my PM spoke to him late last week, and he said he was going to put the money in on Monday (the previous payments were made directly to the PM).

    3. I think I’ve got a good PM, but I guess this is the acid test?

    I’d also welcome suggestions on how to address the problem in a win-win manner.

    Cheers
    Elysium-M

    Profile photo of ErikaErika
    Member
    @erika
    Join Date: 2002
    Post Count: 151

    Hi Elysium-M
    Why are you collecting the rent if you have a PM, are you still paying him? With our PM he rings them if they are a day or 2 late just as a reminder but at 2 weeks he sends them a formal letter outlining what will happen if they dont pay this normally gets a response otherwise it is more letters and court.
    If you are going to manage your own propertis you really need to read up on when and what you can do so that you know when to send out the appropriate letters.

    Erika

    Profile photo of The DIY Dog WashThe DIY Dog Wash
    Member
    @the-diy-dog-wash
    Join Date: 2003
    Post Count: 696

    E-M

    Call you PM first, and get him on to it, if you are no longer paying the PM give the tenant a call just to see if anything has happened.

    He could have broken his leg on the way to the bank … you know what I mean!

    Anyway, don’t assume the worst straight away.

    Then when you get this sorted out arrange to have the money direct debited, it saves lots of head aches.

    Cheers
    Leigh K[:D]

    Carve your own path and lead the way …

    Profile photo of Still in SchoolStill in School
    Member
    @still-in-school
    Join Date: 2003
    Post Count: 1,844

    Hi Elysium-M,

    Not Much we can do as landlords in Australia, the law here protects tenants and is in favour of them. Legally by law, the tenant can pay rent up to 2 weeks at time late, and we cant really do much about it. I wouldnt worry about it, as long as he dont know the system, there shouldn’t be much worry.

    Cheers,
    sis

    People 4get that by saving just $3 a day & investing it sensibly
    over a working life, you’ll end up with around $1 million

    Profile photo of FibejebeFibejebe
    Member
    @fibejebe
    Join Date: 2003
    Post Count: 152

    Slightly off topic…. Make sure you have a good landlords protection policy too so that if he does default or damage the property you are covered.
    Fibejebe.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    One of my tenants is currently 4 weeks behind, and I am in the process of evicting them (Vic).

    I would get your PM to get onto them if they are more than 2 days late. Once they go over 14 days send them a Notice to vacate, and get your PM to go to court (VCAT in Victoria) to get a possession order. Then if they do leave the police can be authorised to kick the tenants out.

    A good source of information are the various tenants unions in each state. They have websites and explain, from a tenants perspective, the process of being evicted including what a landlord can and can’t do. The tenants union Victoria can be found at:
    http://www.tuv.org.au/vacate.htm

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of liverpoolharrykliverpoolharryk
    Member
    @liverpoolharryk
    Join Date: 2003
    Post Count: 28

    Why are you collecting the rent? Should it not go to your PM, and then he/she fowards it onto you at the end of each month?

    Any case here in rainy QLD tenants are allowed to get 7 days behind in rent before a formal notice can be issued. A further 7 days before another notice can be issued & if they still havent paid you may then issue a notice to leave 7 days after that. Usually your PM will phone when tenants are 2/3 days late and find out what is happening.

    Don’t get two concerned, if your PM is on the case they should know what is happening.

    Jarrod
    Jarrod Lane Real Estate[:)]

    Profile photo of jackaroojackaroo
    Member
    @jackaroo
    Join Date: 2004
    Post Count: 2

    Hi,

    Like everyone else why are you collecting the rent if you have a PM? If you go to http://www.rta.com.au this will give you all the info that you require.
    If your tenant receives there income form centrelink or some saught of pension then you have the option of receiving there rent via centerpay. This system takes the rent out of the tenants payment before they receive it so they can’t spend what they don’t have.

    P.S Don’t just assume that your P.M is doing their job you need to keep a close eye on what they are doing. In my experience if you have the time it’s allot easier to manage the property yourself and you save 8%!!![:o)]

    Profile photo of ShusharShushar
    Member
    @shushar
    Join Date: 2003
    Post Count: 190

    My PM came up with the idea of initially increasing the rent by $10 pw but if the tenant paid on time they received a $10 reduction in the rent.

    This meant that when the tenant paid ontime I receive the rent I initially wanted.

    This has worked well for me. [:)]

    Shushar

    “All our dreams can come true, if we have the courage to pursue them.” – Walt Disney

    Profile photo of kay henrykay henry
    Member
    @kay-henry
    Join Date: 2003
    Post Count: 2,737

    Elysium,

    Dunno about the technicalities of lateness etc… but it’s always a good idea to get to know your tenant’s situation.

    I have a very lenient perspective about rentals. Basically, I think noone wants to become homeless by being evicted, and the tenant will try to catch up ASAP. Sometimes people lose their jobs or something else happens- significant, lifechanging things- that might mean a little flexibility is warranted. Most tenants who are not psycho’s will want to have their bills up to date- just like we all do :)) I don’t know many that deliberately rip off a landlord so they can be evicted and move from house to house- that would be a bit of a crazy way for them to live!

    My PM always lets me know what’s happening with tenants- and if there’s a problem, I just discuss it with the PM, and we work out the boundaries around it.

    It’s a good idea not to be too “rent reliant” in paying your mortgage. My tenants’ rents are just extras- the mortgage comes out of my bank account and their rent goes into the mortgage too. Hence, if there’s a problem with tenants, I am not gonna lose the shirt off my back. Always good not to get into hock too deeply- because if the slightest thing goes wrong, the plan falls to pieces.

    kay henry

    Profile photo of Elysium-MElysium-M
    Member
    @elysium-m
    Join Date: 2003
    Post Count: 259

    Hi guys,

    Thanks for all your advice.

    I wasn’t really looking to work out what my legal rights are (pretty easy to do that).

    I was more interested in practical solutions, which avoid things getting out of control and keeps the tenant happy.

    Apparently, the tenant’s pay comes in a couple of days after the rent is due, and he said that he tried to set up a direct debit arrangement with his bank, but somehow it didn’t go through. So there is a reason. The win-win solution, I think, is to allow him to pay his rent within 1 day after payday, even though it’s strictly not what the lease requires.

    And yes, I’ve got landlord’s insurance. Better check to policy to make sure that this “win-win” solution doesn’t leave me exposed!

    What do you guys think about this? Am I being too lenient? I’m thinking that he’s only just moved to a new town, and I should give him a break at the beginning. He’s got a good job and could have the potential to be a good long term tenant.

    Cheers
    Elysium-M

    Profile photo of kay henrykay henry
    Member
    @kay-henry
    Join Date: 2003
    Post Count: 2,737

    Yeah, lysium- give him a break and my bet is, he’ll catch up and he’ll probably develop a bit of loyalty to you for being understanding.

    Then it will be win-win.

    kay henry

    Profile photo of melbearmelbear
    Member
    @melbear
    Join Date: 2003
    Post Count: 2,429

    Elysium, you could always get him to pay the couple of days worth of rent, and then have the rental fall due on payday, so he is then paying on time all the time.

    Cheers
    Mel

    Profile photo of elveselves
    Member
    @elves
    Join Date: 2003
    Post Count: 507

    HI

    can I add as a previous renter on a sole parent income, I struggled to pay rent. My rent was $165 and this was over 10 years ago. Not much room for food and utilities.

    The agent, luckily knew my family and me, and the landlord was agreeable to maintaining rent at that rate, they knew there would be times when I was going to be short or late, and there were times when I tried to pay a few dollars extra to put me in some credit.

    The key for me as a tenant was trust, loyalty, flexibility and a good all round easy landlord. I looked after the place, it was well cared for, I never complained, and I kept to myself.

    Most people panic, but from experience, what most people lack is the communication skills, talk to people, your PM, tell them your expectations, tell them what you are prepared to accept, maybe even suggest that you are negotiable eg in terms of payment date.

    You know sometimes for a centrelink client to pay by direct debit, means an additional charge(some banks chage $5 per transaction for this). If centrelink is late, or stops their money, the direct debit fails, and the bank hits them again witha fee, this can be $30, like a dishonour fee.

    Most people on benefits are living in my opinion below the poverty line. Now two of my renters ( two properties) are centrelink clients, while they have some catching up to do, they pay each fortnight, even a day or two late. They are happy for the flexibility because some things are just beyond their control.

    Now for someone not receiving a benefit, you really dont know their situation, maybe you dont need to know either, but if your property is cared for, and the payments generally come in, go with the flow.

    Most people are out to make money, only a few really try and do the ‘dirty’, but it will all catch up to them in the end.

    Personally, I rather pay the 8-12% property managers fee and be removed from it all. After all the fee is a tax deduction adn it leaves you free to think about other things….

    At the end of the day, we can all worry over rent not being paid, and our own pockets hurting, but you cant do much under 14 days anyway, then it takes longer to try and evict someone. So I can really only suggest to focus that energy into something more constructive…

    LOL
    Elves

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