Do you authorise the property manager to make payments on your behalf for council fee, water...

Just wonder anyone is happy to let your agent to make multiple payments on your behalf:
such as council rates, water rates, water consumption, strata levies, smoke alarm/RCD maintenance?

Or should the owners pay for themselves?

My concern is if let the agent do it for you, you may never find out how much rent you will receive as it could be different for each time.

 

I do for one property - all council, water, smoke alarm paid through rent. Personally not an issue to have some fluctuation in rent received as I have buffer to cover the monthly interest payment. The important part is that the bills are paid on time.

Agent should also gives you rental payment statement, along with copy of invoices. This way I know what's paid and for how much.

For the other property, water only. Council keep sending the invoice to my address, so I pay directly.

 

Do it all myself and have a very healthy Frequent Flyer Point balance as a result of using a credit card to pay as much as I can without using cash.

 

I have a mix. Some pay strata & counci but not the recoverables others pay the lot and a few I pay all of the bills.

Wow for the $2000 outgoings i'll get how many ff points?

 

I've seen 3 different things happen here
1) Tenant gets water bill, pays it and then forwards it onto Property Manger who takes the non-usage portion and bills it to the landlord. This is preferably to the tenant because they get pensioner concession on the bill amount but is highly dangerous for the landlord because if the tenant doesn't pay , it's the LL's credit file it ends up on.

2) The owner sorts it all out himself. This has the benefit of knowing its organised and allows for you to get frequent flyer points on the card you use to pay it with.

3) Property Manager sorts it all out. This is most preferable scenario to me. Passive investing involves automating and streamling. Find someone you can trust and delegate it all off.

 

Should get 2000 with a decent card.

Another reason to pay your bills yourself is it can be used as a way of debt recycling if using something like a LOC for all IP expenses. Freeing up cash from your rent to be used to help pay down non-deductible debt faster.

 

OMG! I'd go crazy if I had to pay it all myself. It's part of what I pay the PM's to do and one less thing for me to do/worry about.

Um....yes, it is different each time, but you've got to pay for it anyway, so I don't understand why this is an issue.

 

PM pays everything except Insurance.
Benefits?
1. Bills are paid on time
2. Less work for me
3. Less mails in my mail box
4. Less hassle at tax time - PM sends a summary
5. Easy record management - PM scans them attaches with monthly statement via email

Negative:
1. Can't collect credit card points
2. Need to let authorities know if we change the PM

 

Totally agree. If you have only one or two, then you have time to stuff around making the payment, scanning the water account and sending it onto the agent.

Get several under your belt and you will soon find better use for your time.

 

It's an opportunity cost if your time will be better spent elsewhere vs doing the administrative works related with paying, documenting and managing.

Personally outsource everything to the PM, get all mails diverted as necessary. Get a consolidated EOFY rental statement at the end of every year.

 

I authorise my PM's to pay for the water rates, usage, council rates, and smoke alarms. My Property Manager then sends the water usage to my tenants, who pay the usage with their rent the next time they pay rent. It works a charm.

Why do I do it like this?

• I don't need to worry about paying it myself
• Less paperwork mailed to me
• Managing Agency will forward me a summary statement at the end of year, which I just hand to my tax accountant. Makes it so easy.

In saying that, when there is a bill like this, my PM also scans the invoice and emails it through to me with the rent statement, so that I can see where the money has gone and that it has been paid correctly. Works a treat!

 

For those who are self-managing and also want trouble free, setup direct debit from a credit card for council rate and water.
Make that credit card only for property investing related payment, so credit card statements for the year are the rental expenses statements.

 

PM does it - one less thing for to me worry about.

 

All my property outgoings are paid each month by my PM's bar loan interest.

At the end of the month all the PM's send me an owners statement with everything itemised on it and deposits the balance of rent into my bank account.

For me its about leveraging other peoples time that frees my time to work on my portfolio and not in it.

The last thing I want to do is become a slave to my portfolio as that defeats the purpose why Im investing in the first instance.

I hope this helps.

 

Thanks guys.
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I guess the credit card idea for IP related payment is a good idea. To earn points...

 

Just wonder what is the difference if you pay water bill 1st, then ask your property manager to pass it to your tenant to pay for the cost comparing if you let tenants to pay for it 1st then pass it to your property manager (PM)...
You mean the tenant may not pay the bill on time, thus if the owner pays 1st, the pass it to the PM to ask the tenant pays the usage back into your account?

 

I think I may do by myself for this time to see any difficulties

 

What if the credit card has annual/monthly account fees? Or if you pay interest on the purchases on the card? Are these then tax deductible? I've always been curious about that one.

 

We pay the rates, many councils have reductions if you pay in one payment, rather than staged payments which PM's may do if there's not enough in the rent kitty

Councils are pretty keen on getting the money in ASAP and as well as a reduction in rates have offers such as "Win a car for up front payments".

Plus as posted above, I get the Credit Card points