Why is it Necessary to Pay Rental Bonds?

To answer that question, you need to understand why rental bonds are needed in the first place and what this helps to achieve. Many investors rent out their premises to help pay a mortgage, to negatively gear their income and also to create an extra income. Owners have to protect themselves in this instance by charging a bond in case the tenant damages the property or is in arrears with their rent when they leave the property. Charging a rental bond helps to protect the owner against this happening. If the amount owing by the tenant is more than the bond, then the owner or agent has the right to pursue this in a court of law.

If you are a property owner or if you are thinking of buying property for a rental investment then it is a wise choice to hire our property management Maribyrnongprofessionals for example to help you manage your rental property and get the most rental income out of it.

With rental bonds, whether taken privately or through an agent, this money needs to be lodged with the Residential Tenancy Authority. You are not allowed to hold the funds yourself and the appropriate forms must be filled out by the tenant and signed. The money must be put in with that form within 10 days of collection.

If you are charging a rent of $700 p/w or less, then the amount of bond that you can charge is equal to four weeks rent. If you charge more than $700 per week then there is no limit to the amount of bond you can charge. When preparing the lease, you need to keep this in mind in order to avoid breaking the law.

Another point to consider is that the tenant has the right to transfer their bond across to a new rental property. If you are aware of this, then you won’t be caught by surprise if it happens. The tenant’s rights are stated very clearly on the paperwork so you should read this and make sure that you understand it all. Having a clear understanding of all the fine print will save you a lot of trouble later on down the track. If you are unsure of something you can always ring the Residential Tenancy Authority.

If you are going to rent out your premises, then you need to make sure you are up with all the tenancy laws as well as familiar with the rental bond process. Our property management Footscray team are the experts in residential bonds.