What is rent in advance? How much do I have to pay?
All about rent in advance
We asked Business Development Manager at Absolute Real Estate, Michelle Kathopoulis for an answer to this question:
“Agents are regularly asked the question: ‘What about my two weeks in advance?’ This question is usually asked about two weeks prior to tenants vacating,” Michelle said.
She said there is a common misconception in the rental market that tenants don’t pay their rent two weeks prior to moving out.
Given the frequency of this question, Michelle has simplified the process for anyone about to start a new rental lease.
“At the beginning of the tenancy, tenants pay their bond and two weeks rent. The two weeks rent amount pays rent for the fortnightly period,” she said.
“Two weeks later, rent is due again. That next rental payment pays rent for the next fortnight and so on.”
RELATED: How does rent in advance work?
Lets say the lease starts on January 1. On this date, the tenant has paid their bond (equivalent to 4 weeks rent) and two weeks rent in advance. The rent is paid for from January 1 to January 13 inclusive, i.e. 14 days.
On January 14: the next two weeks rent is due. The rent is paid from January 14 – January 27. On January 28, rent is due again and the tenancy continues as such.
Michelle said that if the rent continues to be paid regularly and each fortnight, the final rental payment is due and payable two weeks prior to the lease end date.
“In summary, each two weeks of rent is “used” or “credited” for the next 14 days and it starts again. At the end of each period, there is no rent in credit,” she said.
“If your lease starts on a Friday (or whichever day is starts), the next rental payment is due on Friday (or whichever day it started on).
“It is very easy to set up a regular payment direct from your account to the Agency Trust Account with internet banking, occurring every second week.”
Michelle advises renters to be aware of the time it takes to come out of your account and into the Agency’s account – you may need to arrange the transfer a couple of days earlier than the rent due date to ensure it is receipted in time.