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DIY Property Management: Collecting the Rent on Time
When you have only one or two tenants and the rent is paid on time, running rental properties might seem like a breeze. But when you have a number of tenants and things go wrong with even one rental income stream, it’s more like being stuck in a stormy sea. The waves are pounding your cash flow, and the barrage of paperwork hits you at gale force. Baxton Property management in Hobart know what it’s like to face and calm the tempest.
Collecting the Rent
In Tasmania, the rental payment period is generally one or two weeks, and by law it cannot exceed four. It is also illegal there for rent to be charged per calendar month. So what does this mean with regard to rent collection? With such short rental periods, it can prove to be a nightmare of paperwork and rent chasing, if you try to handle it yourself.
Put in a time frame, or added as entries on your mental or actual calendar, the words “Rent Collection” could really clutter the available space. Because, depending on your rental period, it could be as many as four times in one month that you have to collect it from the same tenant. If you have several tenants, and they each have different rental periods, the situation becomes even more complicated – and that’s even if all the tenants pay regularly.
Dealing with Late payment
Unfortunately, it doesn’t always run smoothly. Even the best of tenants might run into difficulties. Knowing this is enough to provide stress even when it hasn’t happened – yet. Repeatedly dealing with the possibility of late payments, and the subconscious concern that you may have to start the lengthy process involved to recoup any outstanding rent, can become a huge issue both for your ROI and your peace of mind.
If the rent does come in, but it is late, your relief will be short. That’s because the whole process of rent collection from that tenant will start again very soon. The next period’s rent is still due on the same day that it would have been, had the rent been paid on time. So if it’s paid 4 days late on a 14-day lease, you will have to start worrying again about the new rental only 10 days later – especially seeing the first one was late.
If the payment is not paid on time, you can launch the Notice to Vacate process, but it only applies to one specific rental period, and each notice gives the tenant 14 days to solve the problem . Where the payment period is weekly, this means the tenant has time to settle those arrears until the end of the next rental period or even well into the third, depending on how early in the first one you had the Notice to Vacate issued. In the meantime at least two more due dates will have passed.
If the rent is paid, even if it is late, no late payment fees are allowed, and neither may you seize goods. In fact, you may take no further action. However, if a tenant is considered to be in arrears for a third time in 12 months, you can serve a final Notice to Vacate and then apply for a court order to evict the tenant, regardless of whether or not the arrears are then settled.
How to Avoid Chasing Late Rent
- Make sure you screen tenants very thoroughly before signing a rental agreement. Check on past rental history and confirm any references.
- Set up a reliable and effective system to handle rent collection. However, when doing so, remember that by law you may not use a system that involves any extra costs for the tenant.
Property Management services like Baxton Property Management in Hobart have the knowledge and experience, as well as well-developed systems in place, to ensure you get the right tenant, and that rent is paid regularly and on time. Visit Baxton’s website to see what services they offer.
Written and syndicated by
– Baxton Media.
- Managing your Rental? The process of finding the right tenant
- DIY Property Management: When Things go Wrong at the Rental
- Property Investors: Is self-managing for you?
We hope you enjoyed this article
The information contained in this article is based on the authors opinion only and is of a general nature which is not indicative of future results or events and does not consider your personal situation or particular needs. Professional advice should always be sought relevant to your circumstances.
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