The importance of the Rental Ledger

Find out the part the rental ledger plays in being able to manage your tenancy efficiently.

What is a Rental Ledger and why is it so important to have one when managing a tenancy? 

If you've ever rented a property, you may have heard the term "rental ledger" before. But what exactly is a rental ledger, and why is it so important for both landlords and tenants?

What is a Rental Ledger? 

Simply put, a rental ledger is a record of all rent payments made by a tenant over the course of their tenancy. It typically includes the date of each payment, the amount paid, and any late fees or other charges incurred.

Why is the Rental Ledger important?

For landlords, maintaining a rental ledger is crucial for several reasons. First and foremost, it ensures that rent payments are being made on time and in full. If a tenant falls behind on their rent, the landlord can use the rental ledger to document the missed payments and take appropriate action, such as issuing a notice to vacate or pursuing legal action.

Performance Tracking

The rental ledger can also be a useful tool for tracking the financial performance of a rental property. By keeping detailed records of rent payments and other expenses, landlords can gain a better understanding of their cash flow and make more  informed decisions when managing their property. 

It is especially handy if you own several rental properties, as it can be one of the best references to ensure everything is running smoothly.

Useful for Tenants too

The ledger is useful for tenants too, as it provides an important record of their rental history. This is particularly useful when applying for future rental properties, as it demonstrates that they have a track record of making rent payments on time.

Resolving disputes and support documentation

The rent ledger serves as a valuable resource in case of a dispute with your tenant. In the event that rent payments are not made, it provides evidence to support the issuance of a breach notice, and if the issue persists, it can serve as evidence in eviction proceedings. 

Additionally, the ledger can prove useful if you need to attend a tribunal to demonstrate that payments were not being met.

Read more - What happens if your tenants don't pay the rent?

Do you need to have a rental ledger?

Yes, in most states in Australia if you are renting out your property you are required by law to provide an accurate rental records or ledger for your tenants. 

The laws vary from state to state but usually you are required to keep the record for at least a year after the tenancy has ended. 

A tenant can ask for a copy of their rent record at any time, and landlords or agents must be able to provide this to their tenant within a certain timeframe (depending on the state). 

It can be inconvenient to track all your rent payments by relying solely on receipts, messages or tawlling through bank accounts to find transactions, particularly if you're managing multiple rental units so the ledger helps avoid all this hassle. 

How can you maintain an accurate rental ledger? 

In order to maintain the ledger you should have detailed records of all rent payments, including the date, amount paid and any amounts outstanding. 

The rental ledger should show:

  • Owner's/Landlord's details
  • Address of the Property
  • Tenants details
  • Weekly rental amount
  • Payment frequency
  • Payment period start and end dates
  • The date the rent was paid
  • The amount paid
  • The date the rent was recorded and receipted
  • The type of payment, whether for rent or water usage (if applicable)
  • The amount of arrears (if applicable)
  • The receipt number or copy of the receipt 

This can be done manually, using a spreadsheet or other tracking tool, or through a property management platform like RentBetter, that automates the process. 

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.

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

An essential tool for both landlords and tenants alike.

Ultimately, the rental ledger is an essential tool for both landlords and tenants. By keeping detailed records of rent payments and other financial transactions, it helps you to make more informed decisions by being able to solve disputes and misunderstandings much faster and ensure that everyone involved in the rental agreement is on the same page. 

If you’d like to learn more about how RentBetter can help you manage your property and stay on top of rental payments, reporting, expenses, maintenance and much more, register for a demo of the platform below.