It’s one of the largest and ugliest jobs in a property management business. It’s the reason property managers can win managements and lose them, and it’s the reason some investors sell their investment property and never enter this wealth race again. It’s the difference between good tenants and bad – late rent.
BY EMILY SIM
The legislation says we have to give the tenant time to pay their rent but the landlord must make their mortgage payment or they’re charged interest and permanently scarred right down to the line item in the eyes of their lender.
In an attempt to make business more profitable, retain landlords and staff, property management businesses have been looking for a way to collect the rent that meets their clients’ requirements. Enter the rent payment system.
These magnificent systems allow tenants to pay rent using online banking methods. Bpay, direct debit, transfer from any of their bank accounts including credit cards. When the rent payment systems entered the property management world, we thought property management and the ancient art of collecting rent would be saved.
There’s a glitch though…
Rent payment systems incur a fee for use. Much like when one uses an ATM separate from their own bank and incurs about a $2 fee. Or like the fee associated with making the car payment online or surcharge for using AMEX or Diners Club cards.
What actually resulted was a massive debate over who should pay this fee. The tenant or the landlord? Even the recent residential tenancies bill passed in the New South Wales Parliament remains grey on this subject.
Because of this fee, for using a service, tenants don’t want to use these methods to pay their rent. In some cases, this fee is as low as $1.65 including GST. Without a rent payment system property managers and landlords are as good at collecting rent as they were in 1980. We have the technology to make a difference and it does save the user time but the resistance remains…
Most property managers will agree; when a tenant agrees to pay their rent via direct debit, the rent is paid in accordance with the terms of the tenancy agreement. Hence the push for tenants to continue to use rent payment systems despite the fee.
Here’s the question though, as a landlord if it meant that the tenant would agree to pay their rent by direct debit, would you agree to pay the fee?
For any landlord that has ever suffered the hardship of frequently late paying tenants, I think the answer would be yes. For the inconvenience that late rent causes, would you rather pay the $1.65 and know the rent is paid?
I know it’s the tenant’s responsibility and you shouldn’t have to take on the payment of this fee to be assured of what you’re entitled to. I do, I understand that. The legislation isn’t going to assist on that delivery, unfortunately. So, in an attempt to just move this monthly annoyance from our lives, would we say yes?
Emily Sim is the brains behind property management online community – www.apmasphere.com. With a career that includes senior roles at McGrath Partners and the Ray White Group, Emily is dedicated to finding new ways to deliver wealth to property investors. Email: firstname.lastname@example.org