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

 

How to talk about your pregnancy at work

The workplace isn't always a friendly place for pregnant women. Yet working women inclined to conceal a pregnancy from prying coworkers may be better off opening up and carrying on, according to a new study.

Tell us your story to win!

To celebrate Mother's Day this year we are giving you the chance to win one of five great prizes simply by telling us your story.

Where to get help to help your baby sleep

There is so much pressure about having a baby who sleeps 'all night' , it's no wonder you worry about your baby if she wakes in the night.

Vintage baby names having a comeback

What makes some names have comebacks while others silently fade into oblivion? A few factors come into play.

When your partner doesn't want you to breastfeed

Dads can have many reasons for not wanting their partners to breastfeed their baby, but both parents should learn more about it before making a final decision.

Model mum Sarah Stage shares post-baby selfie

Most new mums would recoil at the thought, but Sarah Stage has shared a post-pregnancy selfie just four days after giving birth.

I'll admit it: I have last child parenting fatigue

If you're a new mum and feeling ignored by the older mum/the old hand/the has-been, please know, it's not you, it's me. Blame the last child parenting fatigue.

Exhaustion is not the same as tiredness

Having a new baby isn't tiring - it can be downright exhausting.

Five posterior babies, four home births

I was on a high. I'd done it all by myself with no help from anyone.

Mum's list of birthday gift demands goes viral

We're big fans of kids' birthday parties - but this is one bash we're glad we didn't get an invite to.

Kate Middleton to receive 'loyalty discount' for second birth

Everybody loves a bargain - including the Duchess of Cambridge.

Fish & chip shop owner's sad note goes viral

A lengthy note put on the window of a fish & chip shop has gone viral due to the writer's serious doubts about the romance of travel.

Pregnant women need good nutrition advice, not judgment

Pregnant women are under pressure to do all the "right things" to have a healthy child. It results in women feeling judged about their decisions.

When your child wants you to have another baby

Giving your child a sibling when you don't want to have another baby can be a complex issue.

William Tyrrell's mum speaks out: 'We hope he is still alive'

The mother of missing toddler William Tyrrell says she has a vision that somebody "picked him up and moved him on ... that's the only way ... to explain for him not to be there".

Family comes first for 23-year-old Tommy Connolly

Most 23-year-old blokes spend their hard earned cash on fun times with mates or romantic dinners with their girlfriend, but not Tommy Connolly.

Newborn all-girl quintuplets 'doing great'

The first all-female quintuplets born in the United States were delivered last week, at 28 weeks and two days.

Model mum's big baby silences critics

He may be less than a week old, but baby James Hunter has already helped his model mum silence her critics.

Jammy, Hula Hoop, Rage: Reddit reveals most unusual baby names

A recent Reddit thread has revealed some of the more creative names in the world.

Woman awakens from coma, learns she gave birth

A US woman awakened this week from a four-month-long coma that doctors had feared would be permanent and learned that she had given birth to a baby boy, according to her family.

'Give us a break': mum sent shocking letter over Facebook baby pics

Posting a lot of baby photos doesn't make you a bad person. It may make your Facebook feed a little irritating, but it doesn't make you a bad person.

In defense of the dads who do so much

It's time to shift the focus off what dads aren’t doing and shine it on what they are.

The modern cloth nappies too cute to cover up

If you're only just joining the modern cloth nappy movement, or would like to spruce up your collection, we have to introduce you to Designer Bums.

How breastfeeding can affect your libido

When you’ve just had a baby, having sex isn’t usually top priority. In fact, for a lot of women it rates about as appealing as changing another dirty nappy.

Should pregnant women be allowed to use 'parent and child' car parking spots?

Is it acceptable to use these car parking spots when pregnant? How many of us would admit to doing it?

Healthy baby from sperm taken 48 hours after a man died

Fertility doctors have described their "most extraordinary case" - creating a healthy baby from sperm taken 48 hours after a man had died.

Sign up to our 30 days of #PlayIQ challenge

Sign up to receive 30 amazing tips and ideas for play with baby during the month of April and submit a picture or tip on our social wall for a chance to win an amazing Fisher-Price prize pack.

 
Advertisement
 
Advertisement
 
 
 

What's hot on EB

Last chance to win a year's supply of toys

You have less than a week left to win your child one of five Fisher-Price toy packs valued at over $600 each - hurry, enter today!

Childcare is a big problem, but there's more to it

Let’s keep talking about these issues and not allow them to be put into a neat little box that’s labelled ‘Fix childcare and everything is solved’.

Pink's awesome response to body-shaming trolls

When trolls felt the need to comment on 35-year-old singer-songwriter Pink's weight, her answer was an awesome ode to body love.

Fertility clinic offers egg donors $5000

A national chain of fertility clinics is offering egg donors a $5000 payment to cover their expenses, a first for Australia which is raising concerns the money could act as an inducement.

Baby boy abandoned in India amid fresh surrogacy concerns

Australian officials could do nothing to stop an Australian couple from abandoning their baby son, born through surrogacy in India, after they decided they did not want to bring him to Australia.

Herd immunity and community responsibility: how free-riders can make kids suffer

Individual choice works for haircuts and handbags, but not for preventing infectious diseases that kill kids.

Photographer captures 'unexpected beauty' of birth

If there is one thing Leilani Rogers knows about childbirth, it is that no two deliveries are ever the same.

Expectations vs the reality of making a toddler's clothes

Note to self: less sewing, more life. Not the party dress, but the party. The toddler, as usual, has it all figured out.

Mum meets 'dead' daughter 49 years after birth

In 1965, Zella Jackson-Price was told her premature baby girl had died shortly after birth.

How pregnancy probiotics can help you and your baby

New research suggests that taking specific pregnancy probiotics could be the answer to a range of common pregnancy side effects.

53 creative pregnancy announcements

Announcing that you're expecting can be a time to express your creativity, sense of humour and imagination. Check out how other parents and parents-to-be have broken the news to friends and family.

IKEA hacks for the nursery and kids' rooms

Are you one of those that know the whole IKEA catalogue by heart? Love their stuff but want to personalise it? Here's some inspiration to help you realise the potential of IKEA furniture and fittings.

36 baby names inspired by food and drinks

A French court may have ruled out Nutella as a baby name, but that doesn't have to stop you from taking inspiration from the supermarket (or bottle shop). See what parents in the US have chosen for their delicious little ones.

 

ENTER NOW!

Win a year's worth of toys

Last week to submit a picture of your baby at play for your chance to win. Visit the Play Wall to view our recent entries.

 
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.