Rent arrears are the silent killer of rental yield. They start small — one week missed, one half-payment — and most landlords don’t realise how bad the picture has become until they sit down for an end-of-year reconciliation. This guide is the system we wish someone had handed us before we owned our first property.
Most Australian landlords track rent in two places: their bank account and their head. The bank account tells you what landed; your head tells you what was supposed to land. The problem is that “what was supposed to land” is a moving target — weekly rent rolls forward, the occasional overpayment cancels out an earlier shortfall, and a partial payment that you intended to follow up on quietly disappears from memory.
The result is that arrears compound silently. The classic case: a tenant pays $400 instead of $630 in week three, promises to make it up, then pays the regular $630 in week four. You feel like the issue resolved. Three months later you realise the $230 shortfall was never repaid, and now there’s also a $90 gap from week eight that you missed because the bank deposit for that week was actually a double-up of the previous payment.
You need a system that surfaces these shortfalls automatically, ages them, and forces a decision before they grow.
The single biggest improvement most self-managing landlords can make is to stop treating rent as a list of bank deposits and start treating it as a ledger. A ledger has two sides: charges (what was owed) and payments (what was received). The arrears figure is the difference, lease-by-lease, week-by-week.
In PropLedger, every active lease generates a weekly rent charge automatically. When a payment lands, you reconcile it against a specific charge — paid in full, partial, written off, or applied as a credit to a different week. The arrears figure at any moment is just the sum of open charges. There’s no “remembering” involved.
Once you have a ledger, age the arrears. Not all overdue rent is equal. A charge that’s three days late on a tenant who’s otherwise on-time is a different problem from a charge that’s six weeks late on a tenant who already had two write-offs last quarter.
Useful aging buckets for Australian residential leases:
Aging is a feature of how you store the data, not a feature you bolt on later. If your ledger doesn’t track the due date of each charge separately from the payment date, you can’t age — you can only see a total.
The reason landlords let arrears slide isn’t laziness — it’s decision fatigue. Every individual late payment forces a fresh judgment call: is this tenant generally good? Are they going through something? Will sending a notice make things worse? Decision fatigue is why landlords let three weeks become six weeks.
Beat decision fatigue by writing the policy once, then following it. A reasonable starting point for self-managing Australian landlords:
The exact days depend on your state’s residential tenancy legislation — check the current rules for your jurisdiction. What matters is that youaren’t deciding each time. The policy is.
If you ever end up at tribunal, the difference between winning and losing is usually documentation. SMS history, email threads, and dated notes against the lease record matter more than memory.
In PropLedger, every arrears communication can be logged against the specific lease — a one-line note with a timestamp is enough. When you sit down to escalate, the full history is on screen. When you sit down at tribunal, you have receipts.
Sometimes the right answer is to write off a balance. A $50 shortfall that’s been outstanding for a year and is eating five hours of your time is costing you money to chase. A tenant who’s otherwise excellent and went through a rough month doesn’t need to be punished for honesty about their finances.
The key is that a write-off should be deliberate. Note the reason. Note the amount. Note the date. PropLedger records the write-off as a ledger entry with a reason, so your reporting is still clean and your decisions are still visible next time you review the property.
When the system works, your arrears picture should fit on one screen: total outstanding across the portfolio, broken down by property and lease, aged into clear buckets. You should be able to look at it in 60 seconds once a week and know exactly which conversations to have.
That’s the operational difference between landlords who get blindsided by arrears and landlords who don’t. Not better luck. Just better systems.
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