What is your bottom line for rent payment?

[jaycee]

Gee Cee

Didn't you help your tenant out for 18 mths ? thus perpetuating the myth (fact?!) in the tenant's eyes that the landlord will help you out, sort of contributing to the cycle those who beleive these things are in so to speak ?

maybe its the wine, but the 2nd part of your last post sounds like the opposite action you described you took in your earlier post

 

[Nathan]

il put it in perspective...

you work yeh? money is tough atm? your company aint bringing cash in? what would you do if your boss said il pay you in few weeks.... i hope... would you resign or would you keep working in hope to get paid later?
the writing is on the wall....

i think you shall find your answer in the above.

 

[GoAnna!]

Gee Cee

Didn't you help your tenant out for 18 mths ? thus perpetuating the myth (fact?!) in the tenant's eyes that the landlord will help you out, sort of contributing to the cycle those who beleive these things are in so to speak ?

maybe its the wine, but the 2nd part of your last post sounds like the opposite action you described you took in your earlier post

I can't speak for GeeCee but I think many (myself included) are soft the first time they find themselves int his situation. And perhaps the second time. But without fail this seems to perpetuate the problem rather than solve it. So the third time the notice is sent out as soon as legally permitted.

I still have one such tenant on my books. They do pay but seem to need regular reminders (from my PM). If they fall behind they are sent a notice. They quickly catch up. I have them on a month by month lease so that when it suits me to move them along (I would like to renovate but not yet)

 

[Superstitionist]

you work yeh? money is tough atm? your company aint bringing cash in? what would you do if your boss said il pay you in few weeks.... i hope... would you resign or would you keep working in hope to get paid later?
the writing is on the wall....

i think you shall find your answer in the above.

May be I am still quite naive here... But I must say it should depend as I am not blindly to trust and offer help to everyone.

My old man used to teach me that be prepared to help others as long as your action wouldn't put yourself in a deep trouble, and be prepared to trust people as there are more good guys in this world than the bad guys (he quoted this in the 60 though, not sure the ratio still correct in nowadays....).

So in your example, if I have been worked for the company for a very long time and trust the boss wouldn't take advantage of me, and by working without pay wouldn't put me in a real deep trouble, then I must say I may consider it.

With my example, the tenant has been with me for several years already, so I trust her based on her track history record, and if the tenant is really taken advantage of me, then I assume at most is around 2 months rent. Yes, those rent would definitely cause me a bit of inconvenient, but it is not going to put me in a really deep trouble, but what happen if the tenant is really need this bit of help to get through the hurdle at the times...

Just my 2c.

Super.

 

[GoAnna!]

I guess part of th issue is are you really helping the tenant by allowing them to stay on or are you allowing them to dig themselves into a bigger and bigger hole. What exactly is going to change over the next few months to turn the situation around?

 

[skater]

I guess part of th issue is are you really helping the tenant by allowing them to stay on or are you allowing them to dig themselves into a bigger and bigger hole. What exactly is going to change over the next few months to turn the situation around?

I would guess the only thing that is going to happen in the immediate future is Christmas and I bet if you were a fly on the wall you would find that there is plenty to go around.

Don't forget the nice little bonus that low income earners are getting from the government. Considering this cash bonus is about to come in, if she can't catch up, she just isn't trying.

 

[Superstitionist]

I guess part of th issue is are you really helping the tenant by allowing them to stay on or are you allowing them to dig themselves into a bigger and bigger hole. What exactly is going to change over the next few months to turn the situation around?

Well, according to my PM, the tenant is a hard working lady, but due to the economy, her company has cut some of her shifts, so now on one hand, she try to talk with the company to see if she can get more shifts back, on the other hand, she try to look for another part time job.

She didn't hide the fact from us at all that it is not in her flavour in the current climate, but she just need a bit more time to sort out the problem.

Don't forget the nice little bonus that low income earners are getting from the government. Considering this cash bonus is about to come in, if she can't catch up, she just isn't trying.

I would expect to wait until she sort out the employment issue rather than using the bonus, as this is a long term issue. Well, if she uses the bonus to do the catch up, I would appreciate that, but if not, I wouldn't mind either, as I think everyone would desire a wonderful Christmas...

Merry Christmas to you ALL...

Super.

 

[Y33]

Super,

You are caught in a catch 22 situation as you have become involved personally with your tenant. Would you prefer a tenant who is late paying but takes care of the place or someone who will be on time but doesn't take care of the place.

Although it is a business, charity in the right place or at the right time can have its rewards. I would suggest a new payment plan when the tenant agrees to get one month in front. Instead of catching up the tenant tries to put a little extra in each month. It may pay to use the insurance risk as a reason for doing this. If the tenant is reasonable as you have indicated then there shouldn't be a problem.

For those that think investing is purely a business and requires the hard nose approach a revaluation of your thinking is required. As investors you have a unique opportunity to help those who are less fortunate than you and they are not always to blame.

You don't have to be super rich to donate 5-10% of your money or time to help out others. Give it a try. You will be surprised at how satisfying it feels.

 

[oh_noes]

The easiest question to answer to help your decision is; how easy is it for you to find a new full rate paying tenant? If the answer is "hrmm, I don't know, at least 6 months" then weight up the advantages of receiving half payment.

If you PM is useless, I suggest you immediately get rid of him and her. Find someone who isn't.

After that. speak with the tenant directly. The tenant will now be on rent assis, and it's possible they can 'guarantee' to pay $x until they find another job. Obviously this is where the trust comes in. If you don't believe the tenant will come back and pay the full amount (+ more) in 3-6 months, then it's probably wise to remove them.

 

[Gee Cee]

I agree with Christmas but when you own a large portfolio and everyone wants YOU to be Santa it aint good.

The banks will not be Santa to you. Or the Council rates dept or the Land tax Dept or the Aust Govt tax dept etc, etc.

But I am willing to be santa to alllll of these people.

Only thing is that as I am at the bottom of the pile My Own Kids will miss out on Santa.

Merry X/Mas whinging Tenants

 

[skater]

Only thing is that as I am at the bottom of the pile My Own Kids will miss out on Santa.

All I have to say is this. When your kids have been the ones missing out because others won't even try to meet their obligations (and mine have been multiple times) you start to get a bit fed up with it and take the hard line.

This develops over time and the more properties you have in your stable, the less you can afford to have them NOT pay.

YES, there certainly are genuine cases, and I feel for them, but from my experience, the majority that get behind at this time of year especially, are the ones that are having a lovely lifestyle at the expense of the landlord.

Having been there, done that, a multiple of times, these days I use a PM that will use the hard line at the first sign of things going south. Afterall, I bought property to one day benefit my family, not someone elses.

OOps, Gee Cee, I just read what I wrote and realise it sounds like you are a newbie, and I know you aren't. That comment was not directed at you, just using your words to highlight what I wanted to say.

 

[Superstitionist]

The easiest question to answer to help your decision is; how easy is it for you to find a new full rate paying tenant? If the answer is "hrmm, I don't know, at least 6 months" then weight up the advantages of receiving half payment.

Hmmm...I don't think the question would help much, the property is located in Brunswick, closed to tram and bus, I would predict it would snap in no time with current under market rent.

In fact, it is more to do with my mentality, as don't know why, after I read through all the horrible stories in this forum, I still believe compassion and business can mix, but need to handle with care...

I totally agree and understand where you all are coming from. But I am more interest to know is this, if you attach emotion to the investment, would the investment be considered as failure straight away No exception

Super.

 

[GoAnna!]

Hmmm...I don't think the question would help much, the property is located in Brunswick, closed to tram and bus, I would predict it would snap in no time with current under market rent.

In fact, it is more to do with my mentality, as don't know why, after I read through all the horrible stories in this forum, I still believe compassion and business can mix, but need to handle with care...

I totally agree and understand where you all are coming from. But I am more interest to know is this, if you attach emotion to the investment, would the investment be considered as failure straight away No exception

Super.

I think you are misunderstanding some on this thread (well me at least ) I am and have been compassionate but sometimes compassion can misguide you and you can do some-one a disservice by being soft on them. If she can work her way out of the situation in the near future...great! But there is now every chance that she is living beyond her means and that her debt to you will grow and grow. If that is the outcome what will happen then?

 

[Superstitionist]

I think you are misunderstanding some on this thread (well me at least )

Sorry for the misunderstanding, I should have said most or some instead of all...

But there is now every chance that she is living beyond her means and that her debt to you will grow and grow. If that is the outcome what will happen then?

That is the main purpose of this thread, if her debt has reached 4 weeks in arrear (my bottom line), then sorry, the terminated letter will send out accordingly.

Super.

 

[Collector]

There are 2 ways you can go about it:

1) Set up a payment plan for the tenant (tenant is to pay an extra $20 per week until the arrears are cleared) - you should also tell your PM to advice your tenant that she should see Department of Housing as she may qualify for rental assistance

2) A carefully worded letter along with a termination notice. You still have the option to withdraw the notice - and you letter should advice the tenant as such - see below



[Click here and type date]


«Name»
«PostalLine1»
«TenantSuburb» «TenantState» «TenantPCode»


Dear «Salutation»,


«PropAdd1», «PropSuburb» - RENTAL ARREARS – NOTICE TO TERMINATE

According to our records, your rent is paid to «RentPdTo1» with a credit of $«Credit1», as a result you are currently in «ArrearsCalcDays1» days in arrears.

If you disagree with the amount owing or if you have paid your rent in the last few days, please contact me immediately.

Because your rent is now more than 14 days in arrears we are legally obliged to serve you with a Termination Notice. This Notice is attached.

If your rent is paid in full within the next 14 days we will seek the landlord’s instructions as to whether they wish to withdraw the Notice.

If your outstanding rent is not fully paid during this time, an application will be made to the Consumer, Trader & Tenancy Tribunal to terminate your tenancy without any further warning you.

You should be aware that termination of a tenancy for this reason could affect your credit rating in any future property leasing.

Thanking you in anticipation of your cooperation in this matter.

Yours sincerely,

 

[MCS_80]

I have not read all the replies to this thread, however, in my opinion I would act A.S.A.P.

As with anything in life, the longer you leave it, the worse it will get.

Cheers

Mick

 

[Superstitionist]

As with anything in life, the longer you leave it, the worse it will get.

I thought there is a saying "Time Will Heal"...

 

[Glenn]

I don't bother trying to draw a line....that is what the Residential Tenancies Act is for.

For me, I implement the Act because non-payment and recovery of rent always seem to drag on longer than you think...if they are behind by more than a week or two now you can kiss that money goodbye....you have little chance of recovering any of it.

On the other hand, you may enjoy financially supporting these people...it's up to you.

Glenn