Rent arrears can impact on the performance of your investment property and your emotional wellbeing if not managed correctly.
Bad things can happen to good people and should your tenant find themselves in financial struggle or stop paying their rent for any reason, a diligent rent monitoring system will ensure that you as the landlord are not out of pocket.
This includes checking rent payments daily and issuing the appropriate notices as permitted by legislation. The software your property manager uses should provide a daily report of any rental arrears.
The legislation is clear about when the formal notices can be issued, however your property manager should have a detailed arrears follow-up process and should be working with the tenant proactively to resolve any rent arrears from day one.
Some tenants genuinely may have forgotten to pay their rent if they don’t have an automatic payment set up so if it is left until when a notice is issued, the relationship with the tenant can become quite negative.
The key to effectively managing rental arrears is to have a daily monitoring system and proactive communication with the tenant. Handled with negativity, the tenant may end up causing more headaches for you than just rental arrears.
Insurance payouts or court orders may be affected if the correct notices are not issued in line with the legislative requirements, so a thorough knowledge of the timelines and proactive approach to handling rental arrears is critical.