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Top five reasons to use a rental management company

The South African rental market has performed exceptionally well over the past year, with an influx of tenants due to stringent home loan finance criteria among other reasons. 

The northern suburbs of Johannesburg in particular have seen a spike in demand for rental units, with availability battling to keep up, according to Chris Renecle, Managing Director of Renprop.

Many investors have taken advantage of the market conditions, and have seen solid returns; however Renecle says that many of those who invested in rental units have managed the process themselves up until now. “More and more we are seeing investors, especially those who have a number of rental units in their portfolio, starting to move away from self-managed portfolios and engaging in managed mandates instead. Through a managed mandate, Renprop Rentals manages the entire process from tenant screening and pre and post occupation inspections, to rental collection and maintenance management.”

Renecle notes that investors are looking for someone to take care of the details on their behalf, particularly when it comes to rental collections and credit checks. “With the advent of the Credit Amnesty Bill, it has become quite a challenge to determine the quality of the tenant and the credit check process is even more complicated now than it has been in the past.”

Renecle points out that there has also been a surge in international or foreign tenants in certain areas, and from a credit check point of view, it is even more difficult to determine the financial history of a foreign applicant and therefore their suitability as a tenant.

“Landlords who do not vet their tenants against stringent guidelines are putting their investment at risk,” he says.  “This is one of the reasons why landlords are turning to rental management companies to assist them.”

Renecle gives his top reasons for landlords to make use of a rental management company for their rental properties:

1.    Selecting quality over quantity

A good rental management company will scrutinise applicants thoroughly to ensure that they are a quality tenant instead of just someone to fill the rental unit. “Through this process, a letting agent or rental management company will verify absolutely everything,” says Renecle. He also points out that it costs money to evict a tenant, so it is imperative for landlords to make the right choice as to who rents their unit.

2.    Protecting the investment

A rental management company will assist the landlord with the monthly rent collection. They will also be able to assist the landlord should a tenant be defaulting on their payments, and refer them to an expert for legal advice should the situation not be resolved. “A bad tenant will not only possibly not pay the rent; they will also potentially damage the unit and therefore the landlords’ investment. This is why selecting a quality tenant at the outset is so imperative.”

3.    Pre and post occupation inspections

A rental management company will inspect the property with the tenant when they take occupation to ensure everything is in order, as well as when they leave. “Many landlords don’t want to be involved in drawing up snag lists and arranging for items to be fixed, especially if they have a number of rental units that they own. This is a time consuming process, but one that a rental management company will attend to on behalf of the landlord.”

4.    Managing the maintenance

Many investors don’t want to be bothered with maintenance issues, yet they are a vital component in retaining the property’s investment value.  Renecle says that a rental management company will take care of all the maintenance issues on behalf of the landlord.

5.    Complaints and communication

Many misunderstandings can be avoided through effective communication, and this is one of the key roles that a rental management company will fulfil. Through facilitating communication between the landlord and the tenant, the rental management company can also assist the landlord in avoiding legal complications in the event of a conflict.

In conclusion Renecle says that investors need to take whatever measures and precautions possible to ensure that they protect their investment. “It is even more vital than ever before for landlords to carry out the necessary checks on their prospective tenants, particularly in light of the Credit Amnesty Bill.”


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