Time to get down to the nitty-gritty financials – the rental bond. So what is it, and how does it work? Are there options if you can’t afford to pay the bond right away?
What is a rental bond or security bond?
A rental bond is a sum of money requested from tenants on behalf of owners/agents. The rental bond is financial protection in case there’s a breach of the lease agreement. You typically pay a bond to a landlord or property manager before you move into your new house.
You might also like:
– Rental applications: How long before I’m approved for a property?
– Australia’s cheapest (and most expensive) suburbs revealed
– Your rental ledger – Why you should be asking for a copy
How does the bond work?
The bond requires an official document to be prepared and deposited in an approved ‘bond trust’ managed by each state government or approved financial institution.
The landlord or property manager’s responsibility is to lodge the bond lodgement form and money with the relevant state department. Make sure you obtain a receipt for your bond.
The bond amount is specified in the lease document, and the maximum can vary from state to state.
The equivalent of four weeks’ rent is common practice, plus an additional amount in some cases where pets or furnished properties are involved.
You will normally complete a bond lodgement form. The bond money is then lodged into a joint account between you and the landlord, which normally accrues interest for the tenancy term.
Your rental bond will be released at the end of your tenancy, where you may receive a full or partial refund.
Can’t afford the bond upfront? Consider using RentBond
One of the biggest struggles renters encounter in the moving process is coming up with a rental deposit that includes a bond and rent in advance. Paying a few weeks in advance, combined with the burden of hefty moving costs, can be a stretch on many budgets, especially when the bond hasn’t yet been returned from a previous rental.
RentBond is Rent.com.au’s flexible bond loan option that makes paying your moving costs easy. When you apply for a bond loan through RentBond and are approved, we can pay your loan directly to your agent or your nominated bank account (so you can pay the agent or landlord yourself).
You then pay us back over the term of your lease or until the loan is paid in full. If you need a bond loan for your next rental, find out more about how RentBond can help.
“RentBond was easy to apply for and saved me an enormous amount of hassle financially while I moved from one place to the next. I’d recommend RentBond to anyone who finds themselves in a similar situation in the future.” Queensland renter Donna Sooalo.