Onboarding your tenant with a Rental Schedule is important for every successful tenancy.

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Yes, it is as simple as creating a payments schedule and ensuring the tenant pays on time. But ‘what gets measured gets managed’ and if you don’t manage payments you could find yourself in hot water if something goes wrong. 

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This article will help you set-up a transparent payment schedule for you and your tenant.

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How should I calculate my rent?

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We often get asked what the best way to calculate rent is, the best frequency to collect rent, and the best approach to receiving payment. As with most things involving money, the best approach is to keep it simple and transparent.

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There is a common approach to calculate a monthly rental amount which supposedly provides a simple monthly number that gives you a smooth rental income 12 months of the year. 

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The formula applied is typically to divide a weekly rental amount by 7, then times 365 days and then divide this all by 12.

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However, we have found the opposite, and that with a majority of our customers and their tenants, this causes a lot of confusion and friction at both the commencement and end of the lease.

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This formula leaves a lot of room for error and confusion, and can make it difficult if the lease is not completed in a perfect monthly ‘billing’ cycle. 

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We typically recommend keeping it simple by charging a weekly rental amount (after all this is how you advertise a property) and collecting rent more frequently than just once a month or every four weeks.

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A weekly rental collection tends to be a bit too frequent for both tenant and landlord, but fortnightly is ‘just right’. It is common for people to be paid at this frequency, and it also ensures there is a regular contact and payment from the tenant rather than waiting longer periods where the risk increase as more time passes. 

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When collecting rent, most owners will request a direct debit transfer into their bank account, or an automated payment schedule from bank to bank. 

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While this can be very effective, there are two things it cannot solve:

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• If the tenant misses a payment, or pays an incomplete amount, you will need to be on top of bank transfers and payments to be aware this has happened.

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• There is no agreed record of payment between landlord and tenant including a ledger and receipts for payment

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The Rental Ledger

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A rental ledger is a complete statement (or record) of every rent payment you have made, and the dates that the rent covered.

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You may like to keep track of a rental ledger, and issue receipts manually.  We do not doubt that this will work as a solution, but it unfortunately still does not notify you of emerging issues with rental payments for your property.

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What’s the solution? 

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One of the great benefits of the RentBetter platform is the ability to ‘set and forget’. RentBetter gives you more control over rental payments to ensure you get paid on time, every time.

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Set up your weekly payment amount and the frequency of the payments and then let the system run to calculate the amounts due and when. You’ll be notified when theres action required. 

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Your tenants can pay rent using a credit card or their bank account. The system will ensure payments run on schedule as per your lease agreement.

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Payments are tracked, the ledger is automatically updated, and receipts are sent to you and your tenant.

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RentBetter will send automatic alerts and notifications to both you and your tenant. It’s peace of mind to ensure nothing is missed and all payments are received on time.

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Find out more about Rental Payments through RentBetter here. 

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Key Takeaways

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Use a weekly rental price, and collect more frequently than just monthly or every 4 weeks – try fortnightly.

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Rental payments should be supported by:

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(i) Payment schedule

(ii) Rental ledger

(iii) Receipts

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Automate as many tasks as you can to help keep the process simple and easy

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Download the Self-Management eBook.

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Want to understand how to rent out and self-manage your property? Start here - Your step-by-step guide to renting out your own property will include:

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• How to rent out your property - Six simple steps from advertising your property through to signing a lease and managing rental payments.

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• How to start your lease - State-by-state guide for setting up you lease, collecting bond, conducting a condition report & more.

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• Inspection checklist - Everything you need to do to organise and manage inspections.

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• What to do if a tenant doesn’t pay? - What to do next and which state-based laws apply.

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• How to advertise your property - What to include in your property ad to make it stand out.

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• How to select a tenant - What questions to ask and background checks to make.

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• How to collect rent - Payment schedules, rental ledgers, receipts & more.

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