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Landlords are looking for more control over when they receive rental income, with only one in 20 investors being satisfied with receiving their payment two weeks after the tenant had paid rent.
The latest findings were revealed in a recent Smart Property Investment poll conducted in September.
Almost 70 percent of landlords want to receive rent immediately or to have the flexibility to choose when they are paid; 25 percent preferred to be paid at the end of every month.
Less than 5 per cent preferred payment two weeks after the tenant had paid rent.
Mitchell Burge, an investor with a portfolio of 18 residential properties and two commercial assets, believed investors that have to wait for their rental income while it sat in an agency trust account were getting a raw deal.
“I want my rental income in my bank account as soon as it’s paid,” said Burge. “With different mortgage repayments going out every month, and at different days, I want the biggest balance in my account I can possibly have at all times.”
“I use an offset account to help reduce interest payments, so every dollar in my offset is working for me. Every day that my funds are sitting in someone else’s account, it’s benefiting them, not me.”
Burge said he used property managers to manage his portfolio because he didn’t want to get dragged into the day-to-day headaches of directly dealing with tenants.
“The only complaint I have is the lag between when rent is paid and when I see it in my account,” he said.
While landlords may be frustrated with the antiquated way they receive rent from professional property managers, industry veteran, real estate coach and top auctioneer Tom Panos had words of caution to investors considering the do-it-yourself (DIY) path.
“If you want to get depressed, if you want anxiety, let me give you the blueprint to it: manage your own property,” Panos said. “It is a recipe for disaster. It is the thing that will turn you off from building a property portfolio.”
“Trust me; your tenants don’t ring you up to wish you happy birthday. Your tenants ring you up to tell you that it’s going to cost you money, every time they speak to you.”
Panos said, importantly, under a DIY model, you’re not going to have the professional advice to achieve fair rent, which could impact the value of your investment property while also potentially impact cashflow.
“You often become emotionally involved [when you self-manage]; I can’t get over how many landlords under-rent their properties because they say the tenants are really nice people … they’ve been with me for 15 years.
“What happens is when you put the property on the market to sell it, and you show the rental history to a buyer, straightaway that buyer gets affected.”
Rent refers to the payment made by a tenant periodically to a landlord for the use and occupancy of a property.