In our IP we have good tenants that are keen to stay on for long term. There have already been a couple of rental increases ( albeit only small ones) so the bond now doesn't cover the four weeks rent.
I am interested in whether people ask their tenants for increases to the bond when rents go up ?Hi slipper
The ACT's RTA puts it like this:
"Can the bond be increased as well?
No. Standard term cl 15 says that only one bond is payable on any one tenancy agreement.
RTA section 20 specifies that a landlord may only require or accept as bond an amount not exceeding the first 4 weeks of rent payable under the tenancy agreement.
This means that the original amount of bond cannot be increased during the tenancy.
However, if you enter into a new fixed term agreement for the same premises and the original bond is released, then you could be asked to pay a new bond at the increased amount."
I'm pretty sure it's the same all over Australia.Cheers, Paul
Paul Dobson | Vendor Finance Institute
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I was renting a place in Perth and paid an initial bond and then some time into my occupancy the rent went up quite a bit and they asked for an increase in bond… I didn't check to see if they could or not, just paid it, but i assume they were acting legit, so it may not be the same everywhere in Australia?
Best to check with office of fair trading in your state however the bond cannot be changed during the term of the lease. If you then enter into a new lease with the tenant, you may be able to transfer the existing bond into a new bond.
Thanks guys
I wasn't meaning an increase during the term of the lease, but was more thinking when renewing the lease, as I could see there being a big difference between the original 4 weeks of rent for bond and what it would be after a few years of rent increases.
Cheersslipper wrote:In our IP we have good tenants that are keen to stay on for long term. There have already been a couple of rental increases ( albeit only small ones) so the bond now doesn't cover the four weeks rent.
I am interested in whether people ask their tenants for increases to the bond when rents go up ?If the tenant is in continuous occupancy (despite different rent amounts or leases) it depends on the tenancy laws in your State whether you can ask for a higher bond – check your State’s legislation here: http://blog.rentwise.com.au/index.php/2010/05/24/free-forms-and-resources-for-self-managers/
I think the real focus has been lost on this post?
If you know they are good people, why would you dis-respect them by blatantly saying "I do not trust you". I have a lot of respect for all my tenants and in reverse they look after my property. Allow them some space to love your house (provide them with gifts i.e. A/C for your house), don't give them a reason to leave, but encourage them to stay. If your house value is $400k, they are effectively making you $40k pa. Why would you not have the greatest appreciation for your tenants? Property investing is actually a mindset…….
number 8 wrote:I think the real focus has been lost on this post?If you know they are good people, why would you dis-respect them by blatantly saying "I do not trust you". I have a lot of respect for all my tenants and in reverse they look after my property. Allow them some space to love your house (provide them with gifts i.e. A/C for your house), don't give them a reason to leave, but encourage them to stay. If your house value is $400k, they are effectively making you $40k pa. Why would you not have the greatest appreciation for your tenants? Property investing is actually a mindset…….
Very pertinant point – especially the part about dis-respect ( I hadn't thought along those lines ).
We try to keep in good with them with gifts etc. as well as improvements to the house for them and they in turn both look after our house very well and even assist the tradies that go there so that charges are kept down for us.
Cheersnumber 8 wrote:I have a lot of respect for all my tenants and in reverse they look after my property. Allow them some space to love your house (provide them with gifts i.e. A/C for your house), don't give them a reason to leave, but encourage them to stay. If your house value is $400k, they are effectively making you $40k pa. Why would you not have the greatest appreciation for your tenants? Property investing is actually a mindset…….Spot on! Keeping good tenants is a critical part of any successful investment strategy – here are seven ways to do it: http://blog.rentwise.com.au/index.php/2010/06/29/seven-ways-to-keep-good-tenants/
I think the dis-respect comment is very valid. Alot of people are very tight for money at the moment. It could force them to leave and then your property could sit vacant for a few weeks losing you X amount of dollars. If they are good tennants they would get the bond back at the end of the new lease even if it increased. So you wouldn't make money off the bond as such.
Secondly I think the bond should really only be increased if you renovate the property but that would be hard if there have been tennants living there.
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