As a property investor, making sure you are receiving your rent in a timely manner is very important and being paid is something that you will have to stay on top of.

Ultimately, property investors rent out their property to a tenant because of the rental income it produces. For many investors, the rent isn’t going into their pocket. They use the fund to help make any mortgage repayments and also take care of the upkeep of the property and pay the ongoing costs such as council rates, taxes and maintenance. In return, tenants get a place to call home that is well-maintained and safe.

The relationship can start to break down if tenants aren’t doing their part and keeping up with their regular rental payments to the landlord. If the tenant falls behind, the property owner does have some options, but they should also have been on top of the situation well in advance.

Finding good tenants

The best way to ensure that you have a tenant who always pays the rent on time is to work hard at finding a tenant who has proven they have done it in the past.

When you are searching for a tenant it’s critical that you look at the track record of the people who are applying. You need to ask them for details of their rental history including how long they have been in their previous rentals for and how much they were paying.

If a tenant has been renting a property for three years and never missed a payment, then the odds are very high that they will do the same when they rent from you. If the tenant has a patchy history, then the odds are also high that they might miss payments if you take them on.

It’s also a good idea to ensure that the applicants have a regular source of income either through a job or a business, or they have access to cash in the bank so they will be able to pay the rent over the duration of the lease term.

Setting expectations

When you settle on a tenant, it’s also important to set the expectations upfront. To do this you should walk through the lease with them and let them know what is expected when it comes to paying rent.

Some landlords like to be paid monthly, others fortnightly. Whatever the arrangement is, make sure that all pirates involved are aware of what is expected.

It’s also important to make collecting the rent as easy as possible. These days, most tenants will transfer the rent electronically. Be sure that they understand that sometimes these transfers can take time, so it is best to send the rent across earlier rather than on the day itself to avoid it being late. Tenants and owners can also track the payments through property management portals and apps which make the process transparent for all parties.

This is also a good stage in which to focus on building a relationship with the tenant. Either as a landlord or with the help of your property manager. If you can gain the tenant's trust and show that you do care about them and the property, then they will likely be willing to do the right thing by you.

When the rent is late

If the rent is late by just a few days, then it might be a case that the tenant simply forgot to pay the rent. This can happen and the best thing to do is usually to just send them a gentle reminder.

However, after a certain period of time, that differs between each state, late rental payments will be in arrears and legal options should be considered.

If you notify the tenant that the rent is late and they are unable to come to an agreement (or after the rent becomes legally arrears), it is essential to issue the tenant with a legal notification outlining the details of the unpaid rent.

If the rent is still unpaid after the notification, the landlord should consider their legal options. Depending on your state you may issue a Notice to Evict and/or file an application to the local courts or Tribunal.

If the tenant does want to pay the rent, it might be worth finding out why they were late and if they were having financial difficulty, then it’s possible to come up with a legally binding Repayment Plan. This will outline the repayment amount and frequency on top of the regular rent. Often tenants may not be in the financial position to immediately repay all the outstanding rent.

When the rent becomes overdue, the landlord has some options which include continuing the lease or moving to evict the tenant. The details vary from state to state.

In New South Wales, when rent is overdue by 14 days, it is considered arrears. The initial step is to resolve the issue with the tenant. If resolution fails, the landlord can issue a termination notice, giving 14 days for the tenant to vacate. If the tenant disagrees, the landlord can apply to the NCAT for a termination order. If approved, the tenant must legally vacate, and police can enforce the order. A guarantee of tenancy continuation exists if rent is caught up before enforcement.

In Victoria, the process is similar, with rent overdue after 14 days. Resolution attempts are made, and if unsuccessful, the landlord issues a 14-day notice to vacate. The tenant can comply, ignore, or challenge the notice at VCAT. If eviction is necessary, landlords apply for an Order of Possession, and police assistance is obtained.

Queensland considers rent in arrears after 7 days. The resolution process and the issuance of a Notice to Remedy Breach follow. If unresolved, landlords can choose to continue the tenancy or end it with a 7-day notice. If unpaid, a Termination Order and Warrant of Possession can be applied through QCAT.

In Western Australia, rent is considered arrears after 14 days. Resolution attempts are made, and landlords issue a Breach Notice. Depending on the landlord's preference, a 14-day Notice of Termination or a Notice of Termination for Non-Payment of Rent with a 7-day vacate notice is given. Eviction hearings are held in the Magistrates court if needed.

South Australia follows a similar process, with rent overdue by 14 days. Resolution efforts are made, and landlords issue a Notice to Tenant To Remedy Breach. If the breach is not remedied, a possession request is submitted to SACAT, and law enforcement assists in eviction.

In the Australian Capital Territory, rent is considered arrears after 7 days. Attempts to resolve the issue are made, and if unsuccessful, landlords issue a Notice to Vacate. A Termination and Possession Order can be applied through ACAT, with police executing the eviction warrant if necessary.

In Tasmania, rent is overdue after 14 days. Resolution is attempted, and landlords issue a 7-day Notice to Vacate. If unpaid, an Order to Vacate can be applied through the Magistrates Court, and the Bailiff assists in changing locks.

In the Northern Territory, rent is considered arrears after 14 days. Resolution attempts are made, and landlords issue a Notice to Remedy. If unsuccessful, landlords can apply for an Order of Termination through NTCAT, and law enforcement can enforce the order.