What are Rental Arrears and How Can You Minimise Them?

As many Landlords rely on rental income to pay the mortgage on their investment property, it’s important for them and/or Property Managers to stay on top of rental arrears.

If a tenant is late paying their rent because they haven’t paid by the due date, or haven’t paid their rent at all, they are ‘in arrears’

Here are some ways Landlords/Property Managers can reduce the risk of rental arrears.

Secure the right tenant

Check tenancy databases, speak to previous landlords and agents, call up referees, and verify employment details and income to confirm that the tenant/s can afford the asking rent.

Keep on top of arrears

If your tenant has fallen behind in their rent, the sooner you know about it, the sooner you can attempt to resolve the issue. When it comes to late payments, address them promptly before they snowball. Also remember, a missed payment may just be an oversight by the tenant, so get in touch and have a chat.

Establish a positive relationship with your tenant

Build good rapport and a positive working relationship with your tenants. If your tenants are disgruntled, they’re more likely to break their rental agreement, abscond or default on rent. Happy tenants are more likely to pay their rent on time, stay in the property longer and look after it as if it were their own.

Be prepared

For worst case scenarios, understand the legal procedures and why and how you can seek restitution or eviction. If you end up needing to evict or go to court over the matter, having all your paperwork in order will help your case and any subsequent insurance claims too. A specialist landlord insurance policy that offers cover for loss of rent, and specifically rent default, is also a wise investment.

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