In Dolf De Roos book Real Estate Riches, he says that in commercial property you can advertise for the rent to be say 9Kpa and in fact on the contract it be 10Kpa and on payment by the due date you get a 10% discount back down to the 9Kpa advertised price.
He mentions that you can do alot more with commercial, you have more power. So I don't know if you can apply the same to residential.E.g. you advertise rent for a house to be $250, but in the contract it is infact $275 with a 10% discount(back down to $250) if paid by the due date.
If you can do this, is it a good method for getting tenants to pay up on time, everytime.
This probably doesn't work but i'm asking anyway.Best Regards,
Christopher Fife.You can do that with commercial because there are no government authorities telling you what to do and everything can be negotiated between tenant and landlord and their solicitors.
Unfortunately with residential leases, there is something called the tenancy tribunal which writes all the laws and takes the flexibility and creativity out of structuring leases to anyones advantage. The method you described is actually illegal according to the current residential tenancy laws. The rent paid needs to match the lease!
Thank you Xenia. I expected that answer, anyway back onto enjoying my sunday morning.
Happy investing.
Kind Regards,
Christopher Fife.As Xenia suggests – you cannot do this with residential leases.
So protect yourself by ensuring your property manager does a careful tenant check. Of course not having defaulted in the past doesn't ensure they won't become a problem tenant in the future.
Late payments are a "hassle" but don't let them worry you – that's what you pay your property manager to worry about . It's their job to collect the rent
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