All Topics / Help Needed! / Weekly Rent Payments

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  • Profile photo of Tony FlemingTony Fleming
    Participant
    @the-dark-knight
    Join Date: 2008
    Post Count: 396

    Hi forumites,

                        After my current property managers have continually proved themselves more and more useless with every passing day. I have taken the plunge and have organised for a friend who is a Property manager to set up my properties to be self managed by myself. I was just enquiring if anyone knows if you can ask your tenants to pay weekly rather than fortnightly or monthly. I've always being big on having as much money in your offset to pay down your interest payments. I've done some calculations and with my current portfolio it would save me a fair amount of money getting the rent weekly.

    Any help would be greatly appreciated :)  

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
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    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    If you're going to self manage you'll need to introduce yourself – ask them over a casual chat if it's ok if they set up a weekly debit….obviously don't point out that it's so you can save more cash.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Tony FlemingTony Fleming
    Participant
    @the-dark-knight
    Join Date: 2008
    Post Count: 396

    Yeah i was thinking that with my higher rent properties it would even be worth offerring a couple of dollars less if they paid weekly. See how they respond i guess :) 

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
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    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of TaylorChangTaylorChang
    Participant
    @scha9799
    Join Date: 2009
    Post Count: 234

    That's a good idea.

    Offer a bit of discount in return to get pay more frequently, it is a win win strategy.

    the tenant saves some money, you say some interest : )

    TaylorChang | Finance Broker
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    Home loan | Commercial loan | 0414 691 517

    Profile photo of thecrestthecrest
    Participant
    @thecrest
    Join Date: 2004
    Post Count: 992

    Suggest you get the ones onboard who are willing or for whom weekly rent really suits, before offering incentives.

    The Residential Tenancies Act states that rent must be in advance at all times, but you can't default a tenant on rent until the sun sets on an unpaid day.

    Also, they can pay you anyway they want, weekly, daily, fortnightly or every 13.5 days if they want, as long as there are no arrears, they have satisfied the Act.

    However,, you can make set arrangements before starting a tenancy as part of your agreement, but remember some landlord wishes are not enforceable.

    Cheers

    thecrest

    thecrest | Tony Neale - Statewide Motel Brokers
    http://www.statewidemotelbrokers.com.au
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    selling motels in NSW

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Agree with Crest.

    I wouldn't worry about incentives. Just ask them if it's ok to start paying weekly – for most it should be as easy as changing the direct debit they have set up from monthly to weekly.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    They would probably prefer to make payments in line with their own pay cycle – will make things easier for their own budgetting. Worth the question tough.

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
    Join Date: 2005
    Post Count: 3,850

    Jacm

    Your numbers are slightly skewiff but good for demonstrating your point:

    $12 * 52 / .08 = $7800

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    I agree with Jamie.  There is no need to discount your product. 

    Remember that your rental yield dictates serviceability of subsequent loans (and as such how much you can borrow).  Also, depending on the kind of building it is, the rental yield can dictate valuation and thus equity.

    When interest rates were hovering between 6.5 and 7%, the bank serviceability rule seemed to go like this:

    A $12 rental hike enables you to go and borrow another $7800.  The equation went like this:

    $12 x 0.08 / 52 = $7800.

    Doesn't sound like much but when you have a few IPs it all adds up to a substantial amount.

    Then depending on the building type (eg commercial building, or residential unit block) your valuation can be tied to yield on the 6.5% rule.  eg:

    $12 x 52 / 0.065 = $9600.  So in essence by putting the rent up $12 you manufacture $9600 of capital growth.  Or conversely, put the rent down and you have negative growth.

    Bet you don't feel like offering discounts now hey!

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Jacqui MiddletonJacqui Middleton
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    @jacm
    Join Date: 2009
    Post Count: 2,539

    true, close enough for illustration tho. edited for preciseness wink

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of CatalystCatalyst
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    @catalyst
    Join Date: 2008
    Post Count: 1,404

    Have you actually worked out how much you will be saving? If you give a discount I think nothing.

    So you get $500? a week early so you will be $500 ahead each week so you are saving $500 x 6%pa = $30???? WOOOHOOOO!!!!

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,850
    JacM wrote:
    true, close enough for illustration tho. edited for preciseness wink

    I am just a pedant

    Profile photo of Tony FlemingTony Fleming
    Participant
    @the-dark-knight
    Join Date: 2008
    Post Count: 396

    LOL no i would never give a discount unless they weren't willing to pay weekly. I should have written that in but yeah don't worry I'm not the discount giving type of guy :)

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
    Email Me | Phone Me

    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of kong71286kong71286
    Participant
    @kong71286
    Join Date: 2009
    Post Count: 261

    The last 2 weeks has been quite an interesting experience for me. enlightened

    What I have learnt is that agreements should be made on paper, rather than made verbally, so that there is no misunderstanding from either side, and there is something to refer back to in an event of a dispute.

Viewing 14 posts - 1 through 14 (of 14 total)

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