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 Mike
Spencer* Old-fashioned advice to curb a silent cash guzzler.
Are bank charges chewing into your rental income? I recently received
a notice to let me know about the increase in bank charges on my property
bonds. R52 pm service fee for each bond including second bonds, Plus R12,50
for each cheque I use to pay my bond and R16,50 when I paid in cash!
But the same thing will happen when your tenant pay his rental. While
this may not seem like a huge amount of money when you are receiving large
rentals it is an irritation when you are accepting rentals of R3 000 pm.
Either way it can add up to a lot of money. R198 per annum if your tenant
pays cash and R150 pa when paying by cheque. When you are letting out
self-store garages this could be a substantial portion of your rental
income!
In the old days there was always a clause in the tenant's lease to state
that all payment had to be "free of bank exchange". Meaning
that if there were costs involved in paying through a bank then the tenant
had to pick up these charges. Maybe it is time for us to go back to a
similar system today.
In the chain of rental payment this all adds up. The tenant pays the
managing agent, the managing agent pays the landlord. This could mean
a cost of between R33 on cash payment and R25,00 for cheque payments.
A substantial loss to everyone.
For more about bank charges and your home loan, read Rage over home loan
fees.
* Mike Spencer is a Bloemfontein-based property valuer, estate agent
and sectional title expert with Platinum Global.
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Newsletter:
12 March to 19 March 2010 - Vaal Triangle, South Africa
