Rental Bonds: The Basics

in Rental

If you're serious about breaking into the real estate scene, you're going to have to educate yourself about the basics of being a landlord. Even if you hire a topnotch property management firm to handle the day-to-day necessities for you, it pays to have an inkling about what needs to be done. Rental bonds are something that any skilled property investor should know about; you can learn a few basics about them below.

What is the Purpose of a Rental Bond?

Some people believe that rental bonds are strictly designed to protect landlords. In reality, though, they work to protect the interests of both parties. In the event of damages to the rented property or in cases of unpaid rents, landlords can always fall back on the rental bonds that they have collected. Tenants can protect themselves financially by providing a rental bond, which is protected under law. These bonds are usually paid at the beginning of a new leasing period.

Do Landlords Hold Rental Bonds?

Another popular misconception is that landlords collect rental bonds and keep them for their tenants. Since that scenario opens up far too many opportunities for abuse, such bonds are actually handed over to Renting Services (a part of the NSW Office of Fair Trading), for safekeeping. Renting Services must receive the bonds within 7 days of a lease signing. On top of that, a bond lodgment must be filled out and signed by the tenant; it has to be submitted to Renting Services, too.

Are Rental Bonds Always Returned?

Most of the time, rental bonds are returned, in full, to tenants. That's because damages beyond regular wear and tear, along with missed rent payments, aren't terribly common. If a landlord has a case for damages, though, or if the tenant hasn't paid rent as agreed, a rental bond may not be returned to the tenant. Basically, the bond helps to hold tenants accountable for the property that they are renting. In order to get back the amount paid for the bond, tenants will need to take great care of the property and to regularly pay due rent.

How Much is the Typical Rental Bond?

Rental bond amounts can vary from one situation to the next. The maximum bond of an unfurnished property is equivalent to 4 weeks rent, while that of a furnished property can amount to 6 weeks rent. Confer with an experienced property manager to get a clear idea about the correct bond amount and its lodgment.

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Going without a rental bond is a risky proposition. Savvy real estate Sydney investors know that rental bonds are imperative. Although an experienced property management Sydney company like Starr Partners Real Estate http://www.starrpartnerscampbelltown.com.au/ can help you out, it's still smart to learn as much as you can about collecting rental bonds.

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Rental Bonds: The Basics

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This article was published on 2010/12/07