When money is tight, there is an increased risk of tenants failing to pay their rent however there are steps that can be taken to minimise the risk of rent arrears.
The truth is that costs are rising as inflation outpaces wages growth, interest rates (while now on hold for almost a year) have risen, and unemployment is on the up. Tenants are also facing a tight rental market, with rents rising amid low vacancy rates. SQM Research figures for September 2024 put the median national rent for houses at $695 per week and units at $549 per week, while the vacancy rate for August was just 1.3 per cent.
Rent arrears are something that no one wants—neither tenants nor landlords—and it’s always best to avoid them if possible. However, sometimes circumstances arise that make it difficult for tenants to stay on top of their payments.
Here are some key steps we take to minimize the risk and help prevent arrears from becoming an issue.
Carefully vet tenants
Placing the right tenants in a rental property from the start is essential. That’s why we thoroughly screen all prospective tenants. We check tenancy databases, speak with previous landlords and property managers to confirm if tenants were reliable with payments and left with no outstanding rent, and follow up with referees. Additionally, we verify employment details and income to ensure they’re a good fit for the property.
Keep on top of arrears
It is all too easy for a missed payment or two to gradually spiral out of control if the tenant cannot catch up. If tenants fall behind in their rent, we quickly attempt to resolve the issue.
Maintain a positive relationship with tenants
We focus on building a strong rapports and positive working relationships with our tenants. By keeping communication open and transparent, tenants feel comfortable reaching out if they’re experiencing any payment difficulties. This early notice allows us to address the issue promptly, putting a plan in place to manage arrears before it becomes unmanageable.
In summary, proactive steps are essential to minimize the risk of rent arrears. Through careful tenant screening, prompt follow-up on missed payments, and strong tenant relationships, we help prevent issues from escalating, creating a smoother rental experience for both tenants and landlords.
