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Bill Paying...from personal acc\cc or via property manager

Discussion in 'Property Management' started by Andrewtfarr, 5th Jun, 2016.

  1. Andrewtfarr

    Andrewtfarr Active Member

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    Hi All,

    Quick process question. For those with 2-3 properties +, do you pay for your general property expenses from:

    - Personal\offset account
    - Personal credit card
    - Have your property manager pay for bills out of your rental account

    I have 3 properties with another 2 coming on the horizon so am looking to move away from paying everything from my cc and getting rid of it to help bolster my servicability so wondering if the best approach is to just hand everything over to my property manager to pay from my rental account.

    For those that do this do you just have them pay strata, council rates and water rates or also insurance? My feeling is I would be keen to pay insurance myself to be 100% sure it's done given potential risk exposure if payments for it are missed.

    Thanks everyone and have an amazing week!
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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  3. Azazel

    Azazel Well-Known Member

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    I pay mine from the credit card, then transfer money.
    Trying to collect some points on my new card.
    I would consider getting the property manager to pay it.
     
  4. Marg4000

    Marg4000 Well-Known Member

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    If you get the PM to pay, make sure there is a firm strategy in place for the time when there is not enough credit in your account to pay the bills. Late fees are no fun.

    And remember, paying your bills is your responsibility. Any slip ups will have repercussions for you.
    Marg
     
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  5. Azazel

    Azazel Well-Known Member

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    That's mostly why I still do it, I'm responsible for it.
    Don't really trust anyone else for that at this stage.
     
  6. monty

    monty Well-Known Member

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    I've had property managers paying my expenses for 2 IPs for a year or two now with no troubles. I'm still have mixed feelings about doing this though. It is convenient but I feel a little out of touch with what expenses I am incurring if I don't pay the bills myself. I get the figures in the statements of course but it's not quite the same as paying the money yourself.
     
  7. Azazel

    Azazel Well-Known Member

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    Well at least you can keep an eye on it with the monthly rental statements.
    Does the PM follow up with the tenant for excess water as well?
     
  8. Marg4000

    Marg4000 Well-Known Member

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    Exactly!
    Marg
     
  9. citystar

    citystar Well-Known Member

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    I keep 100% control over all of my IP expenses, none of this goes to the property manager. I use my credit card to take advantage of the interest free days and pay it off in full each month. This keeps more money in my offset account. Come tax time, my spreadsheet and CC statement are easy to match off so I don't miss any deductions.
     
  10. Scott No Mates

    Scott No Mates Well-Known Member

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    Excess water is a term which disappeared in Sydney Water areas years ago. Tenants pay all water usage if water efficient.
     
  11. D.T.

    D.T. Adelaide Property Manager Business Member

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    Water is the debatable one in all states bar Victoria.

    For all the others, pay them yourself if you want to get frequent flyer points on your card or if your tax advisor has suggested you borrow to pay the expenses. Or, have PM pay them if you want a hands off experience to property investing.

    With the software we use, the monthly statement automatically has a scanned copy of paid bills and the end of financial year statement correctly categorises everything to align with what your tax accountant would want.
     
  12. Elives

    Elives Well-Known Member

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    atm i have a separate offset account that all rents / bills come in / out off for ips. I would like to use my personal credit card as i'd then be able to collect points. but i'm not sure if this will then become to messy for book keeping / tax time.
     
  13. Andrewtfarr

    Andrewtfarr Active Member

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    Thanks all, some really great feedback.

    I'm not impartial to keeping payment in house and do feel I would prefer to own the responsibility and process.

    I'm currently paying as many bills as I can from my CC to get the interest free days but this also means needing to have a limit higher than I would prefer which may impact borrowing capacity down the track.

    Terry's response was great as I wasn't aware borrowing to pay expenses was even possible so may explore this further for the tax advantages, although I can see this having the same impact on borrowing cap as the CC once I start to hit those ceilings!
     
  14. Andrewtfarr

    Andrewtfarr Active Member

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    Do you even use the CC for bills where you pay a fee (1.5% etc) for paying via CC? I don't mean for AMEX etc but have noticed some providers will even charge a cc premium for any type of CC. The alternative is usually setting up DD or Manual Transfer, neither of which give you the benefit of interest free days!
     
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  15. markson

    markson Well-Known Member

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    I found to get around this with most places is to use Aus Post BillPay and pay via PayPal which links to your Amex. No fees no surcharge. Points points points.
     
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  16. Andrewtfarr

    Andrewtfarr Active Member

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    Great idea and yes I notice most offer postbillpay as an option now!!! Many thanks!
     
  17. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    re agents not paying, many years ago I suffered a court judgment because the agents didn't pay the rates on one of my properties. Agent's reimbursed me for my costs but I had this on my credit report for 5 years.
     
  18. citystar

    citystar Well-Known Member

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    A few bills like to add credit card surcharges to them. In this situation I pay via EFT as soon as I get the bill, just post date the payment to the day before it's due via internet banking.
     
  19. Azazel

    Azazel Well-Known Member

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    Yeah, via that option or BPay, whatever it's called.
    There is a minority that don't accept payment from a credit card.
     
  20. dabbler

    dabbler Well-Known Member

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    I pay all IP bills, only ones agency pays is approved repairs/maintenance

    This way I manage the cashflow, I know what the statements should be reading like, and no funny business and cut down on excuses.