rates all coming at once

I live in townsville and have my PPOR and two IP's (I plan to buy more)
and the rates bills all arrive on the same day and they're all around $1800 per half year. Is this the same in other areas? I know a guy that has 11 IP's all in townsville i think so he must have to save a lot to be able to pay. From what I've read on here these rates are pretty high also. How do people with multiple properties plan and save for what must be a massive bill? can you stagger or pro rata so that the bills fall in different months? also insurance bills are high 2 - 4k also per annum also almost all around the same time each year. If I had a lot of houses it could get quite tight

 

Yes, most rates seem to come in August and February if charged six-monthly. Worst were councils who charged annually on one hit!
Budget for these expenses, especially if you own multiple properties.
Marg

 

All of mine come in around Feb, but I've got the option of full payment or quarterly instalments. I thought this was normal?

 

dont most councils accept quarterly?? and have them directed to the PM and you wont even have to look at them
call your insurance to adjust the dates

 

We put aside money per month for these bills, so when we get them we can pay them fully (saving a little) and don't have a month where it takes us months to recover from. Meantime the savings sits in an offset account further reducing the cost.

PS we do this for everything, cars, Christmas presents, insurances, holidays etc.

We also pay using our credit card and get frequent flyer points, these just saved us over $5000 on return trips to the USA and UK.

 

They don't even need to be in the same suburb.
My IP council and water, plus PPOR strata, water and council arrived within 1-2 week of each other. Mainly because they are all Quarterly bills and most place send them around the same time.

I paid by CC and wait until almost it's due date - i.e. stagger it before and after monthly CC statements.

 

I pay all my rates for various different councils fortnightly by direct debit so that the payments are spread out evenly over the year. Might be worth checking if you can do that too. It's a bit of a pain at the end of the financial year as you have to work out which payment belongs to which property, but some councils will print out a summary of payments for each property which is very helpful.

 

Can you pay annually in advance and get a discount?
Paying in one chunk saves a lot of admin and some councils give you a discount for advance payment.
The others the tenant are billed directly

 

They come at the same time in each state, so if you have places in NSW, they all arrive and fall due same time.

You just plan to save the reqd money in offset, or have the PM manage it where they will set a budget usually.

 

Yep, I presume council does a huge batch run of the rates notices. There seems to be different batch run for ownership entity (eg the rates for properties owned in personal names go out at different times to the rates of properties owned by companies, trusts and SMSF). I can well imagine you would not enjoy opening the letterbox on rates day

 

Yep, most of our properties are in Brisbane and, once every quarter, BCC fills up our letter box.

We know when they are coming and we roughly know the amounts - so we just budget for it.

Rent is paid to us every week/fortnight, so it isn't that hard.

 

This could be good - you have more justification for needing to borrow to pay them. (debt recycling).

 

We do the same as @Hodgo many years ago I got fed up of "surprise" bills, (the surprise being we never had the money to pay for them), so we sat down one say and listed every single bill, broke each into 12 and made a spreadsheet and a budget sheet. We took a bunch of money from savings to front load it (which hurt at the time), and every spare penny for the next few of months went into the bills pot until we have it covered then ever since we have save 1/12th of each bill, each month. That way when an annual bill drops in the money is already there to pay it out. The 1/12th gets increased for the next year based on the current bill. It all sits in the one offset pot but is allocated based on the spreadsheet, (which has become a work of art over the last 15 years.... ).

 

Its easy.....do what we do every month, we have a BSB/Account direct debit payment come out of the account for 1/12th of the annual amount (well everything except for Land tax).

So basically strata, council, water, insurance etc all gets taken care of every month and apart from a strata levy or some other minor variation its gone from our account before we even pay the mortgage shortfall each month.

Easy peasy and no stress.

 

Go on a payment plan monthly direct debit from your account rent go into. Renegotiate your insurance as this seems a tad high, but it is Townsville and they would class that as cyclone area. Other than that it's all a Cost of being an investor.

 

From the start - each IP has had its own cash buffer. Helps smooth these kinds of bumps.
That and I'm a crazy budgeter - every dollar accounted for.

 

Doesn't everyone do this?
When we bought our first home, we added up the total of all the bills for the year ahead then divided by 50 (not 52) so we knew how much to keep aside every week. It is then easy to adjust for PPOR plus IPs, and these days it is a fortnightly transfer across from our private account to cover the shortfall from the rents in the business account.

 

You just need a buffer of funds.The buffer would be in proportion to the amount of IPs you have. I feel like if multiple rates come in at the same time and you don't have funds for it you are in dangerous territory. If there is some major repair that would be more than these rates how would you handle that?

You would expect that your cashflow from rent would increase in line with the amount of properties and the associated expenses from them. So whether you have 2 IPs or 22, the revenue should be covering things like council rates.

 

Don't come to my house during rates time!

You need to rockclimb to get to the top bill