Tenants consistently pay late

[kathryn d]

Having tenants pay late can be a problem.
This month 8 of our 33 tenants paid late.
Many will ask us to delay depositing their cheques, and some we have agreed to take split cheques for their monthly rent.

Some of our mortgages we pay weekly, so that keeps all of mortgages not coming due on the same day.We have bills staggered throughout the month, so that helps us too.

We issued one tenant a "notice to quit" August 1, because he just kept putting us off.Yesterday he did a runner. We are happy about that actually, as he was a problem.
Gives us a chance to get a tenant who pays on time.

 

[Perp]

I've been fortunate, by the sound of it. I still wish to move beyond resi investing and think it sucks for a whole bunch of reasons, but late rent payments aren't one of the main reasons. I must have had at least 50 or 60 tenants by now, and I can't think of a single time when late payment of rent has become an issue for me. I've certainly never had to evict for non-payment.

I don't doubt that it is a big issue, I'm just wondering whether:

1) I'm so oblivious to the administrivia that I actually have had loads of payment problems that I've never known about. This is possible - in terms of my disinterest in the detail - but I would know if a tenant had been evicted for non-payment, and I'm sure I've not had that experience. Have I just had good PMs and/or been lucky?

2) Is it true, as I've heard from several PMs, that students (majority of my tenants) cause all sorts of maintenance and other hassles, but do tend to be good payers?

Very interesting to have such a different experience, anyway.

 

[Ausprop]

2) Is it true, as I've heard from several PMs, that students (majority of my tenants) cause all sorts of maintenance and other hassles, but do tend to be good payers?

i've had a mixed experience. one group wrecked my solid wood floors, left all their rubbish and filth etc and when I made a demand for payment a cheque turned up from Daddy in kuwait... so Ithought oh well fair enough.

the guys from HK in the next unit attempted to clean it up themselves but scratched all the stainless steel etc and really had no idea. the girl that bought it was on the doorstep in tears (literally) and the PM was useless and jsut stood there saying it was fair wear and tear.

 

[wylie]

I believe we see the "problems" here on SS where someone is looking for help with problem tenants. We never see any figures for tenants that are not a problem. My parents bought their first IP 34 years ago and I bought mine 31 years ago. Instead of talking about the three problem tenants my parents have had and the two problem tenants we have had, perhaps a few of us should list how many hundreds of good, no-fuss, no problem, normal tenants we have had over those years.

I don't care if my tenants are one week away from not being able to pay their rent, as long as it doesn't happen. Statistically, it is pretty rare, and I don't think I am special. Maybe I manage our places more tightly than your regular PM, who has a few hundred places to manage, or maybe I pick my tenants more carefully.

Every time we have had a problem tenant, it has been when we have needed cash flow and have accepted a tenant when the gut feeling is "not sure".

It is silly to say the number of bad tenant issues is indicated by the threads here on SS.

 

[GreenGoblin]

Folks, thanks for your replies and advice. I plan to ring the tenant to explain the issue on our side and try to find out if the late payment is a timing thing or not. If so, I'll try to get them to pay an additional week's rent to get ahead of their pay date or discuss splitting rental payments. If they stick to their '14 days late' right, we'll move onto advising them we may not be renewing the lease when it ends early next year.

Thanks once again,
GreenGoblin

 

[evee1]

We had 5 tenants all together and 4 of them were great, but our PM ended up in VCAT three times with the 5th tenant over the delayed payments/eviction (in the course of 4 years). Once even the police were called to assist in eviction but the tenant paid in the last minute. At that point we had an opportunity to get rid of that tenant, but decided against it. He keeps the property in a relatively good shape and those incidents did not cause us any financial issues (no problem with paying our mortgage on time, no loss of interest etc), so rather than looking for another tenant and paying the letting fee we keep him. In the next year of so we might knock the house down anyway, so then he will have to move out anyway...

I would talk to the tenants and find a solution that hopefully suits both parties. Especially if they are good tenants and look after your property. You might find that the next lot is much worse ;-).

Good luck.

 

[alplant]

We have tenants that consistently pay late. They have been really good tenants in the way they care for the house and for a long while we weighed that up against the late payments, and decided to live with it. But lately they are been slipping further behind and we have come to the conclusion that they just can't afford to live there. Perhaps your tenants are in the same boat. It's unfortunate if they have money problems and we feel sorry for them but at the end of the day we aren't welfare housing, and there are cheaper places around so maybe it's time they found one.