So I have been investing in property for over 12 years now and really I haven't had any/many problems with tenants not paying. I put this down to a) purchasing middle to high median price range houses, b) choosing my own tenants (not using real estate agents), c) buying properties with existing, well-paying tenants and d) being a pretty good landlord that leaves the tenants alone to get on with their life, such that it is in their best interests to stay in the home and be good payers.
However the last fortnight - one of my corporate tenants has firstly not paid, until I reminded her and then secondly this week not paid at all!
Given all the doom and gloom in the paper about mining and the economy in general, I must admit both D and I got the colliwobbles about our choices in investment.
I have $10,000 due in interest at the end of the month and $8,000 in cash, without this week's rent payment. Those numbers don't add up.
So D and I are banned from using cash at all, until we receive payment in case I need to tip all our cash into paying the interest. Heaven knows then how we will last until end of the month with no cash - hope everything we need can take visa or mastercard - and then I just push the problem off a month.
However after a night of hand wringing about options if this tenant (a corporate) was in cashflow difficulties, was not going to pay, perhaps didn't want to rent the house anymore if their employee was no longer need with the mines etc etc, I rang her.
She wasn't there - an assistant took my call - and was lovely! She explained my normal contact had a birthday last week and was snowed under with house guests and was a bit away with the fairies. And this week she was away altogether. This assistant then emailed me a few hoours later to apologise and say that my normal contact was the only one in the office authorised to make the payment so it may only be able to put through next Monday, a week late.
The sceptical of you may think I am having the wool pulled over my eyes, but I don't think so. Having worked in accounting offices and knowing accounting processes in small business (appalling mismanaged and badly handled) - it all sounds too familiar!! So relief for D and I that it is a blip not a major-investment-decision-challenging event.
So there is another instalment in the drama of property investing. Otherwise all well - our first mining town property corporate has signed again for the 3rd year running with a non-greedy rent increase from us. So that gives us absolute certainty on that property for 12 months.
As for personal cashflow - think this month's actuals versus budget is going to come in very good! Nothing like no money to make you not spend money!!
We are not going to do the small extension on our house to make a separate study - was only about $12,000 but it wouldn't add any value to the house, and really we can survive with out it. We will put my desk, computer and filing cabinet in T's new bedroom instead in the meantime.
On another note - have you seen the new Westpac iPad banking app - very good! Easy to use and quick!!
Labels: Property Investing