So does this means it is still legal for us to keep the bond money in our offset account for the duration of the tenancy and then release it to the tenant in full when they leave ?
Has anyone here self-manage more than one IP to maximize income ?
- Thread starter JohnHenry
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So does this means it is still legal for us to keep the bond money in our offset account for the duration of the tenancy and then release it to the tenant in full when they leave ?
Absolutely NOT legal to hold onto the bond money. Lodge it properly and save yourself from getting into trouble.
It sounds like you NEED a property manager, at least until you understand the rules.
ah even when I return it back in full to the tenant after the contract has ended ?
Danger Will Robinson Danger
the RTA considers, failure to lodge the bond, to be an offence punishable by very large finesyou must lodge the bond with the appropriate authority within the statutory time
learn the rules, you should not play the game on your own until you do, hence the prompt above to engage a pm while you learn, (but dont just trust the pm, look over their shoulder while you learn)
the penalties for landlords are 20 penalty units, 40 penalty units and 50 penalty units, for various offences I stopped looking, 1 penalty unit is $110.00, the bond isnt worth itNSW Gov said:
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So it's not really a Bond then, more of a teaser locked away under someone else's control.
....'Bond' sounds a bit like the label 'Property Manager'.....gives all sorts of warm fuzzy comforts for the Landlord at the outset, but the reality of what the Landlord receives at the back end far from meets that expectation.
....'Bond' sounds a bit like the label 'Property Manager'.....gives all sorts of warm fuzzy comforts for the Landlord at the outset, but the reality of what the Landlord receives at the back end far from meets that expectation.
The bond absolutely must be paid immediately to the government's Bond Board (at least in NSW, and most assuredly I expect elsewhere). As a self-manager I've done this religiously.
They invest it and return no interest to you or to the tenants on it, but use the interest revenue to fund the service (and any left over goes to State revenue). We are actually talking hundreds of millions (if not billions) in residential bonds in NSW too (retail got its own similar system in NSW around 5 yrs ago).
The funny thing is that quite literally millions of this goes unclaimed every year, because many incompetent R/E staff fail to recover the bonds properly, and just pay bonds back out of R/E office operating revenues. I know, because I actually worked in an R/E office for a year or so (don't remind me!), audited the trust accounts as thoroughly as I could, and found $180K of unrecovered bonds over the preceding 7 yrs - and just for this tiny 5-personnel agency alone!
The problem though was to prove it (because, if you make a single mis-step, it's a statutory trust fund fraud offence that could send the principal to jail) and that R/E office just didn't keep its records well enough to do so, which meant it basically had to write it all off as a loss. (I did contact a couple of forensic accountancy firms, and they basically said they'd have to charge roughly the same amount of money to reconstruct the records needed for sufficient proof to safely recover the money.) The head office of the group when I contacted them on this suspected the problem was widespread but widely unreported.
The problem arises I think because R/Es are largely staffed by comparatively temporary, relatively low paid and quite poorly-trained staff, so on the whole this sort of thing happens reliably, and of course all to the government's benefit. I'd guess 5% to 10% of the money they hold in the Bond Board of NSW will never, ever be recovered by anyone because of this.
Nice little perpetual interest earner for the gubbmimt, eh?
They invest it and return no interest to you or to the tenants on it, but use the interest revenue to fund the service (and any left over goes to State revenue). We are actually talking hundreds of millions (if not billions) in residential bonds in NSW too (retail got its own similar system in NSW around 5 yrs ago).
The funny thing is that quite literally millions of this goes unclaimed every year, because many incompetent R/E staff fail to recover the bonds properly, and just pay bonds back out of R/E office operating revenues. I know, because I actually worked in an R/E office for a year or so (don't remind me!), audited the trust accounts as thoroughly as I could, and found $180K of unrecovered bonds over the preceding 7 yrs - and just for this tiny 5-personnel agency alone!
The problem though was to prove it (because, if you make a single mis-step, it's a statutory trust fund fraud offence that could send the principal to jail) and that R/E office just didn't keep its records well enough to do so, which meant it basically had to write it all off as a loss. (I did contact a couple of forensic accountancy firms, and they basically said they'd have to charge roughly the same amount of money to reconstruct the records needed for sufficient proof to safely recover the money.) The head office of the group when I contacted them on this suspected the problem was widespread but widely unreported.
The problem arises I think because R/Es are largely staffed by comparatively temporary, relatively low paid and quite poorly-trained staff, so on the whole this sort of thing happens reliably, and of course all to the government's benefit. I'd guess 5% to 10% of the money they hold in the Bond Board of NSW will never, ever be recovered by anyone because of this.
Nice little perpetual interest earner for the gubbmimt, eh?
not sure what this means - taxation has no relevance - it only means you save money on the PM fees. nothing illegal about self managing your IPs.
i did a few, one with a girl i used to out with and another friend - both diasterous..late payments and favours now and then.... nowadays i just use PMs.
Disclosure of ownership
Thanks for all the informative posts in this thread.
My question is:
Can you self manage your investment properties and not disclose to your tenants that you are the actual owner so they think your are just a PM?
I was wondering that maybe a reason for doing this would be because tenants might be more likely to keep up to date on payments, etc. if they think they have a tough PM who is actively involved and not there to be friendly but to get a job done. You may also be able to find out information from tenants they would otherwise not disclose to you if they knew you were the property owner. Compared to just the owner of the property, where they might try and get one up on you.
I might be completely wrong is this, but I was just wondering.
Any thoughts?
Cheers Guys
Thanks for all the informative posts in this thread.
My question is:
Can you self manage your investment properties and not disclose to your tenants that you are the actual owner so they think your are just a PM?
I was wondering that maybe a reason for doing this would be because tenants might be more likely to keep up to date on payments, etc. if they think they have a tough PM who is actively involved and not there to be friendly but to get a job done. You may also be able to find out information from tenants they would otherwise not disclose to you if they knew you were the property owner. Compared to just the owner of the property, where they might try and get one up on you.
I might be completely wrong is this, but I was just wondering.
Any thoughts?
Cheers Guys
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