Centerlink

Hi Mat,

This is what the NZ government opted to do with all their beneficiaries a few years back. Now beneficiaries are almost “in demand” tenants, ’cause you’re rent is government guaranteed – well until they get a job, anyway.

good thinking getting this to work with Centrelink.

Craig.

100% of the shots I don’t make don’t go in – Wayne Gretzky

we had a tenant once whose rent came straight out of his centrelink pay….altho we never had any dramas with him and paying rent, from talking to our property manager it isnt as good as it sounds as the tenant can just call centrelink and cancel the direct debit (as mentioned in above post) without telling anyone…kind of takes the point away from it really if they can just do that.

Cheers

Tim

Another thing to consider with centrelink payments is that if the tenant owes money for Tax, Child maintenance or over payment of centrelink payments or two identities or a defacto discovery the money could be taken out of the centrelink payments. This may mean your centrelink payment doesn’t cover the rent.

It’s called Centrepay and the tenant can cancel the authoristion for funds to be deducted at any time or if their payment is less than the rent then you will only get what is there ie: if they do some casual work and their Centrelink payment drops to say $100 on the fortnight that your $300 rent was supposed to be dedcuted then you will only get $100 and you will still need to chase them for the shortfall.

We know that the tenant can definitely cancel the authorisation they put in place anytime they like as our tenant did. The only way they wouldn’t be able to is if you got it as part of the court order.

Having said that for many tenants who really do want to pay the rent but are just bad at budgeting this works as the rent is paid first and they are happy that that happens and won’t cancel the deductions from their pension. However there’s also bad tenants who just drag out the time they stay in your house for little or no rent then they’ll use this as a ruse to prolong the agony by letting the rent come out the first one or two times then they’ll cancel or change the amount authorised to be deducted so that you don’t get rent and then you need to start the eviction caper all over again.

Also, a fee of $1.01 is taken out of each lot of rent money sent to you, this is Centrepays charge for doing this (they say 99 cents, but once GST is added, it’s $1.01). It clearly states in the Centrepay agreement that you cannot pass this charge onto the tenant, it’s something you need to absorb, however, it’s small bikkies if it means that the rent does actually come through on time.

So yes, this is a good thing, but you do also need to be aware of the pitfalls and if a problem with rent occurrs even with this in place then get them out pronto!

Regards
PK

Like it was said earlier its not a set and forget, i also had a tennant paying the rent through centrelink payments but then he informed centrelink he didnt want to pay the rent out of his centrelink payment anymore so they cancelled it and they dont even bother to let you the landlord know. As i had 6 properties on the go at the same time it was 2 months later that i realized the payments had stopped, so i rang up centrelink and they were like oh he cancelled that months ago. I know i know i should have kept a closer eye on it but when its government i thought since i was getting paid first and the tennant second it was pretty safe. Live and learn.
Hopefully your tennant will keep up there payments for you ,but check your account every month for when that check should go in.

Cheers
Risky

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From the above posts, it seems that a landlord can set up as a CentrePay "Participant" i.e. you don't need to go through a property manager?

I've been trying to get one of my tenants onto CentrePay via the property manager, but the PM has been pretty slack about ensuring the paperwork is done. I'm thinking of just sacking the PM and setting up the CentrePay thing directly.

Any thoughts?

Daedalus.

Jaffasoft, that's a pretty ordinary attitude. This centrepay system is a LAST resort. If rent on my property is $200/wk then I want and should get $200. The excuses Ive heard "oh cant pay this  week cos the car broke down"" Theyre on the dole ffs, get a bike. "Can't pay this week cos teh dog has vet bills".  er so you can afford a dog but cant afford to pay for the roof over your head.

We have the lowest unemployment stats in years so frankly those who don't work dont want to. I knocked on the door at half past noon the other day and he had to get dressed as he was still in bed. Ive offered him painting work at my own home…….doesnt turn up.
a read on the thread "my worst property experience' will probably explain my heated response.

Can you still get "companion animals allowance" when you are on benefits?

if you are looking for a safe rental income then i would have to recommend the group that rents my property, Homes North. they are a goverment funded, non-profit group that rent to non-rentables, meaning people that have either not paid rent or have damaged there other properties and no one will rent to them any more. sounds pretty scary i know but when you get paid your rent one month in advance on the first of every month whether some one is living in the house or not, as well as any and all damages done to the property (out side of general wear and tear) are covered as well, it makes for a fantasic IP. oh and they also work as a PM for the siimple fact is that you don't need one, they will get quotes for any maintence then pay for it up front and take it out of the monthly rent.

you will not be buying great properties but the rent is higher due to the type of tenent,, and have found it to be a great starting place for new investors,, or people who see a reno or development site in a few years time and just want to hold the property hassle free for a few years.