What to expect of PM?

[zeph34]

Hi all,
I'm new to the IP world, and have been renting out my first house for about 8 months. I have a PM that I chose based on others recommendations. The rate is a little higher than others in the area (8%+GST, SE Melbourne) but based on the personal recommendations I decided to go with them.

I'm still with my first tenants, they have been fine (or rather, I haven't received any information saying otherwise). I get paid fortnightly. Twice now the payment hasn't come through on the correct date - when emailing them, I have received responses that suggest they didn't realise, and that they'll contact the tenant and sort it out. The first time was just a mistake on the tenants part, the second time just happened, but I presume it was the same thing.

What I'm more concerned about is the fact that the PM didn't seem to realise that the payment is late, and that they would chase it up now that I had mentioned it. Is this common practice? We're only talking a few days, just I'm trying to be on top of it, as I've read about how quickly late payments can turn into a problem. Also, the PM has said that (providing payment comes through), I will be paid when they next do payments (which is once a week). Again, is this common practice?

Because I have no experience at this, I just wanted to check if a few days is nothing - should I expect the PM to contact me if the tenant is 1 day/5 days/1 week etc late? I should point out that the tenant IS 2 weeks ahead in rent, as this is how the PM has all their tenants.

 

[burty85]

I have had a few tenants pay a few days late, no biggy... Im talking only a few days, my PM has only sent me one letter stating that one of my tenants was 5 days late, she made a quick phone call to the tenant and all sorted...

Over all my tenants have all paid on time. I wouldnt stress too much about a day or two late in the big picture...

As for the PM, they may just be waiting those few days to see if the rent is coming in, no point in phoning the LL every time rent is in a day late... that would really annoy me.

 

[Sez]

I don't contact my landlords every time a tenant is a few days late but I do contact my tenants. The reason for this is that when I sign up a new landlord I talk them through my process of rent arrears and they know it will be taken care of. If it gets to over a few days late I send them an email and let them know what action has been taken to date and what further action will be taken.

When you say your tenants are two weeks in advance, do you mean an additional two weeks OR they pay for 2 weeks then live through 2 weeks? If they are an additional two weeks in advance on top of their regular fortnightly payments then they won't appear on any arrears lists if their payment is a few days late. If they are paying two weeks in advance as they go then they should have been contacted by your PM.

Also take into account the payment method. I once worked for a company where due to the method of rent payment it could take as much as 5 days to clear to their trust account. As a result they couldn't chase rent arrears earlier then 5 days with much gusto as they were more often than not calling people who had paid their rent.

As far as paying you within the week, every agency varies. Some agencies pay weekly, mid month, end of month and some only do one of these options. Other agencies do payments to landlords every day or every second day so you'll get it when they do. It really varies a lot!

You are right that their rate is a little higher but if they are looking after your property well with no real issues then worth every penny! From what I know of other agencies in the area I think I've only come across one who regularly charge 8.8%. If you are with who I think you might be then I will say that over the years I have taken VERY, VERY FEW properties from them and heard little to no complaints. This is certainly a sign of a good PM!!

Lastly, a belated congratulations on your first IP, I am pleased to hear that it is going well and I hope it is a most rewarding experience for you in the future. If you ever have any questions and you're a little worried about what the norm is just flick me an email or PM, I'm happy to help put your mind at ease!!!

 

[zeph34]

Thanks for the insight guys, hopefully it's all good, we'll see tomorrow!