Jump to content

Question for Landlords
Would you accept 12 months rent in advance?


  • Please log in to reply
21 replies to this topic

#1 blondie82

Posted 09 April 2012 - 04:21 PM

As per the title.....so would you accept this from a prospective tenant?

Is that an attractive offer?

#2 mumma78

Posted 09 April 2012 - 04:24 PM

I had a friend who did this, offered that much up front, but no-one would accept his offer. Not sure why, I am interested as to why this would be.

#3 TwiceTheWoman

Posted 09 April 2012 - 04:25 PM

Hell yes.  It means the tennant is serious.  I'd be especially happy given today's economic climate.
P.S., Have had it offered only recently and accepted.

#4 Pompol

Posted 09 April 2012 - 04:27 PM

SIL accepted this from a tenant. They offered 12 months in advance but at $20 / week less. The market where she is was very competitive but she managed to save a bucket on interest on the mortgage so it was win/win.

#5 Guest_Cathode_*

Posted 09 April 2012 - 04:31 PM

As a Landlord, I would accept 12 months rent in advance - provided it wouldn't be on a cross over for a CPI (annual) or market review (we do that every 3yrs).

#6 Goggie

Posted 09 April 2012 - 04:36 PM

Yep. A friend of mine had a similar offer from a family that had fire damaged house and needed renovating and repair. It was an insurance payout so she was happy to take the money upfront for guaranteed tenant.

#7 Eeyolet

Posted 09 April 2012 - 04:38 PM

My Mum offered this as she was in between selling and building a house, the landlord gladly accepted.

#8 Madnesscraves

Posted 09 April 2012 - 04:40 PM

Yep. Doesn't bother me. 12 months upfront sounds good. Had 1 tenant offer 3 months advance but they backed out at last minute.

#9 sandy_1985

Posted 09 April 2012 - 04:43 PM

Sorry not a LL, but a renter.
We offered 8 weeks in advanced on our application, and when we paid the amount we said we would the RE was confused. Apparently they didn't see the offer.

We offered the extra upfront to create a positive relationship and to get some requested modifications through.

#10 opethmum

Posted 09 April 2012 - 04:50 PM

As long as their references check out then no problem and all the power to you. Also I would just request RE inspections just to check that they are not using your house/unit as a boarding house set up.


#11 JRA

Posted 09 April 2012 - 04:50 PM

The tax implications of getting 12mths in advance may not be worth it.

But I am not sure how you need to account for it as an individual when it has been received in advance as compared to a business.

So I would need to look into that.

If it is deemed to be income, even though you haven't as yet provided the service, no. It would bump up income too much (depending on the time of the year) and then push up the PAYE tax the next year a lot higher, when in fact it shouldn't be.

Edited by JRA, 09 April 2012 - 04:50 PM.


#12 mombasa

Posted 09 April 2012 - 05:14 PM

We would, our tenants currently pay 3 monthly.

#13 Guest_Retro_Mumma_*

Posted 09 April 2012 - 07:33 PM

No, id have to pay more tax that financial year.

Also if the market allows I usually put the rent up after 6 months depending on the rent review.

#14 Guest_holy_j_*

Posted 09 April 2012 - 07:45 PM

Another consideration, if you take that money and put it off a loan or something, then the tenants decide to break lease, you could have to cough up that money in a hurry.

#15 mum@work

Posted 09 April 2012 - 08:22 PM

We took 6 months in advance. It mean that it was in our account and not theirs. The only issue with that length of time might be that if you have to end their lease for any reason, you want to make sure that you have some of the rent if you need to return it.

#16 SeaPrincess

Posted 09 April 2012 - 08:50 PM

It wouldn't persuade me to take someone without doing all the proper reference checks, and I'd also maintain the normal inspection schedule. TBH, I don't think our property manager would go for it - when expenses come in, such as maintenance or rates, they are deducted from our rental income, so it's easier to be paid periodically anyway.

R

#17 casime

Posted 12 April 2012 - 01:03 PM

I did it once for a property that I rented.  I'd sold my place, and was waiting to build a new one.  It was easier to just pay the nine months rent in one lump sum at the start after my old house settled and not worry about paying during the tenancy.    

If the tenant concerned me in any way then I wouldn't take it, but if they seemed like good people and had good references, then I'd be happy to take it.

#18 lozoodle

Posted 12 April 2012 - 01:09 PM

I'd be hesitant to do that because it would affect the tax effectiveness of the property, wouldn't it?  Having that bulk amount come in up front would then mean that my income was more than my expenses on it for that financial year which would mean no tax break.

One of my main reasons for having an investment property is because it reduces my taxable income.

Or I could be wrong that receiving 12 months in advance would do that? unsure.gif

#19 Guest_tigerdog_*

Posted 12 April 2012 - 01:13 PM

QUOTE (holy_j @ 09/04/2012, 07:45 PM) <{POST_SNAPBACK}>
Another consideration, if you take that money and put it off a loan or something, then the tenants decide to break lease, you could have to cough up that money in a hurry.


This is what I thought, or if something happens and you have to sell the house (you could put it in mortgage redraw though, but then as PPs have pointed out, there may be negative tax implications).

#20 BetteBoop

Posted 12 April 2012 - 01:14 PM

QUOTE (JRA @ 09/04/2012, 04:50 PM) <{POST_SNAPBACK}>
The tax implications of getting 12mths in advance may not be worth it.

But I am not sure how you need to account for it as an individual when it has been received in advance as compared to a business.

So I would need to look into that.

If it is deemed to be income, even though you haven't as yet provided the service, no. It would bump up income too much (depending on the time of the year) and then push up the PAYE tax the next year a lot higher, when in fact it shouldn't be.


This is a good point.

My father accepted 12 months rent in advance so to offset tax, he put it straight on the mortgage repayments on the rental premises.

He negotiated a cheaper rate with the bank for paying upfront so it was win/win. But if you don't do this, it means you get all income in one financial year which could have a tax bill at the end of the financial year.

#21 Charlotte84

Posted 12 April 2012 - 01:15 PM

As a LL no I would not accept the 12 months for 2 reasons:

tax purposes mainly

and if for some reason the lease had to be broken who owes who what could get messy.  

Getting 3 months or so rent in advance can be attractive (not so much anymore for us) but personally that doesn't sway me as a LL. (I know some people would be different)

#22 Pearson

Posted 12 April 2012 - 01:18 PM

Why not just take 6 months up front?




1 user(s) are reading this topic

0 members, 1 guests, 0 anonymous users

 

WIN an exclusive performance from Sam Moran!

To celebrate the release of children?s musical series Play Along with Sam, out now on DVD, we?re giving one lucky parent the chance to have Sam perform at their child?s pre-school or day care!

Toddler freed after getting trapped in escalator

A shopping centre escalator needed to be pulled apart to free a toddler's trapped hand.

Why I'm kind of excited about my daughter's nits

Is it weird to say that I am secretly thrilled to find that my daughter Edie has nits?

Baby born at 10:11 on 12-13-14

Well, it's actually 13-12-14 to us over here. But still, Clare Elizabeth Keane's consecutive numerical birth time is pretty special.

On holding tightly and loving fiercely

We can't live in fear. This post is about Christmas and how at this time we should be celebrating life and grateful for what we have: our loved ones who we cherish fiercely.

Babies, relatives and coping with Christmas day

Everyone will love your baby but your baby may not be so happy to be passed around a lot of new people - nor may you want to feed with an audience.

Why I won't be posting pictures of my baby on Facebook

There are pros and cons to this policy.

The myths and truths of gender swaying

Here are a few popular methods hopeful parents-to-be use to try to get a baby of their preferred gender – and what an expert says about whether they really work.

10 easy DIY Christmas decoration ideas

It's officially time to get into the Christmas spirit. Why not branch out when you put up your tree this year and add a personal touch with a few DIY decorations? We've found the perfect easy-to-make ways to put more festive fever into your home.

The dangerous new trend of glucose challenge test refusal

A dangerous trend is seeing more mothers-to-be declining a relatively simple and painless test to check for gestational diabetes.

Office of Fair Trading reveals naughty toys ahead of Christmas

The Office of Fair Trading has pulled seven toys from shelves ahead of Christmas after they fail safety tests.

Video: Baby boy's trouble with twins

These twin girls will no doubt have fun fooling people in years to come, but nobody will be as confused as baby Landon.

Long-term reversible male contraceptive on its way

Men could soon have access to an injectable long-term contraceptive which works in a similar way to a vasectomy but promises to be easily reversed.

'I tried to kill my baby': one mum's story

After bathing and dressing her three-month-old son, Amanda had a rare moment alone with her baby.

Attack of the 'mummy brain'

I feel that almost every day, someone in my life - be they a friend, family member or complete stranger - feels the need to excuse my behaviour as I have other things on my mind.

Mum of baby who fell ill after drinking raw milk speaks out

A Melbourne mother has described how her son turned grey when he became seriously ill after drinking raw milk.

Australian divorce rate lowest since 1976

Modern newlyweds are now well into their 30s and marriage still offers something powerful a new book argues.

The aftermath of a traumatic birth experience

In Australia, 30 per cent of women find their birth experience traumatic, with 6 per cent going on to develop post traumatic stress disorder (PTSD).

Young mum burns 'from inside-out'

A young mum is in intensive care after she took a friend's antibiotic and wound up with an ailment that is burning her body 'from the inside-out'.

The disagreement that can break a relationship

If he doesn't change his mind, all I can hope is that I will. It would be a waste to spend the rest of my marriage mourning a baby that never was.

Download now: Essential Kids Activity Finder app

Got bored kids? Quickly find the best activities for kids wherever you are in Australia with the Essential Kids app.

 
Advertisement
 
Advertisement
 
 
 

What's hot on EB

Co-sleeping or no-sleeping? Mum videos worst nap ever

One mother's futile attempt to sleep in caught on camera in a hilarious - and very cute - video.

Why children misbehave during the festive season

While we all like to imagine the holiday season as being a fun, loving and bonding experience; often our reality is quiet different.

I was fat-shamed by my doctor

The fear of being weighed is the most significant factor in women cancelling medical appointments - and now weight-shaming has happened to me.

End of an era: no more childcare

As we reach the end of 2014, we're closing the book on many things for another year, most notably childcare. Our last child has attended childcare for the very last time.

WIN an exclusive performance from Sam Moran!

To celebrate the release of children?s musical series Play Along with Sam, out now on DVD, we?re giving one lucky parent the chance to have Sam perform at their child?s pre-school or day care!

The 7-year itch is more like the 10-year itch: study

Contrary to popular belief, making it past the seven-year mark doesn't mean your marriage will be smooth sailing from there on.

Should children be forced to sit on Santa's lap?

We teach kids it’s okay to say no if they don’t feel safe, so why do some parents force their children to climb in to Santa's lap?

Stop telling us that parenting gets harder

I’m sure that parenting will get harder. But life isn’t exactly smooth sailing for many of us right now, either.

Baby born weighing almost 14 pounds

Yes, the bouncing baby girl was born by caesarean section. And mum says no more kids.

The dummy debate

I'm the first to admit that when I used to see tiny babies with dummies in their mouths, I thought "Hmm, lazy parenting." And now I apologise.

'I thought I was an only child'

Imagine meeting your double at a school sports event, or regularly being mistaken for someone you haven't met. Separated twins Margaret and Joy tell their story.

Carers admit to force-feeding children

As Sydney grieves the loss of Sydney siege victims Katrina Dawson and Tori Johnson, reports have suggested that both died as heroes.

 

How many weeks til Christmas?

On your To-Do list

Get the "Santa" shopping done without the kids in tow.

 
Advertisement
 
 
Essential Baby and Essential Kids is the place to find parenting information and parenting support relating to conception, pregnancy, birth, babies, toddlers, kids, maternity, family budgeting, family travel, nutrition and wellbeing, family entertainment, kids entertainment, tips for the family home, child-friendly recipes and parenting. Try our pregnancy due date calculator to determine your due date, or our ovulation calculator to predict ovulation and your fertile period. Our pregnancy week by week guide shows your baby's stages of development. Access our very active mum's discussion groups in the Essential Baby forums or the Essential Kids forums to talk to mums about conception, pregnancy, birth, babies, toddlers, kids and parenting lifestyle. Essential Baby also offers a baby names database of more than 22,000 baby names, popular baby names, boys' names, girls' names and baby names advice in our baby names forum. Essential Kids features a range of free printable worksheets for kids from preschool years through to primary school years. For the latest baby clothes, maternity clothes, maternity accessories, toddler products, kids toys and kids clothing, breastfeeding and other parenting resources, check out Essential Baby and Essential Kids.