Because we work in the real estate industry, it’s much easier for us to understand the implications of things like late rental payments on landlords. So if you’re a tenant, this might be a good read for you because it will help you understand what happens when you’re late paying your rent.
Property investors provide a means of housing for people who prefer to rent or can’t afford to buy, but that doesn’t mean they’re loaded with cash. For many mum and dad investors, they’re just as cautious about family budgeting as anyone else so when their tenant doesn’t pay their rent on time, it can have dramatic consequences.
1) Late rental payments mean the investor doesn’t get the money they expect to receive from that property.
2) This could disrupt budgeting for their investment mortgage payments and leave them out of pocket quite significantly.
3) If this happens consistently, the tenant may be issued with notices about their arrears, and eventually could be asked to vacate the property so that the investor can find a more reliable tenant. This isn’t a good prospect for tenants, and not ideal for investors because they’ve entered an agreement with the tenant that they would pay their rent on time.
4) Because most investors rely on the income from their investment property to cover some of the cost of the mortgage of the investment property, if things become too financially difficult they may have to sell the investment property, which is not only a major inconvenience for tenants, but the property could be sold to anyone… and may not be another investor.
5) With very low vacancy rates here in Mudgee, demand is high, so losing a secured rental property definitely isn’t something that most tenants in this area would be keen on.
The lesson here is that as tenants, you need to ensure they’re budgeting for your rent as a major priority because the consequences of paying your rent consistently late can be more than you think. So hopefully this post has given you some insight into why it is important not only to the landlord but to yourself as a tenant, to pay your rent on time.