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Advice for aspiring landlords

If handled in the correct manner, owning a rental portfolio can be a highly rewarding experience, says Annie van den Berg, Broker/Owner of RE/MAX Wildlife Properties, whose office is based in Hoedspruit, Limpopo. However, she notes that not every property investor necessarily wants to be a landlord.

“While many investors may want to own a rental portfolio, it doesn’t always mean that they have the time or resources to effectively manage their rental properties. Property investors will soon realise that there is a learning curve to becoming a successful landlord. There is legislation that needs to be understood and adhered to, and being a landlord is not always a 9 to 5 job. As a landlord, the property owner will have to wear many hats and be able to effectively deal with all of the aspects that letting out a property entails,” says van den Berg.

She says one of the most important roles of a landlord will be to vet potential tenants, as this will have a direct impact on financial viability of the rental portfolio. “Along with the rewards there are risks, one of them being potentially dealing with delinquent tenants who do not pay their rental on time or at all.  Having a vetting process in place and selecting the right tenant will largely mitigate the risk of paying for legal proceedings if the tenant fails to pay for several months. Litigation and eviction can be a very costly process so it is vital that the landlord selects the right tenant from the outset,” advises van den Berg.

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that due to South African legislation, selecting the right tenant can be a rather complex process. However, there are various ways that landlords can ensure that they are protected from the risk of delinquent tenants. “Before a landlord advertises the property, they should determine the conditions of the rental agreement. The more specific the landlord is – the better. These conditions could include aspects such as no pets or that a tenant that is non-smoker,” says Goslett. He notes that another essential aspect is to stipulate in the advertisement that all potential tenants will be thoroughly screened. This will have a significant impact on the number of potential tenants that apply, narrowing the selection down to those who meet the criteria.”

Van den Berg says that the selection process can be further streamlined by asking potential tenants to complete a detailed application form. “In the form the landlord should ask for permission to run a credit check, verify income and previous rental history. It is very important to obtain a list of contactable references, as well as supporting documentation such as a copy of their ID and a salary slip,” she says.

Van den Berg points out that drawing up and signing a comprehensive lease agreement is the next step to take once all the checks have been completed and a tenant has been selected. “Ideally the agreement should be as detailed as possible, dealing with all aspects of the rental. The terms must be agreed upon and signed by both parties.  This will avoid any confusion or uncertainty regarding each party’s obligations in honouring the agreement.”

Ultimately even though a lease agreement allows the tenant to take occupation of the property, it is still the owner’s responsibility to maintain the property. “Being a landlord means accepting the fact that there will be maintenance costs from time to time. Landlords are not obligated to perform cosmetic repairs, however they will be obligated to undertake repairs if the safety of the occupants has been compromised,” says van den Berg.

She notes that hiring a rental agent will take a large portion of the work away from the property owner. “Landlords who use the services of a qualified rental agent will not have to deal directly with the tenant. An agent will conduct the prospective tenant meetings, carry out the vetting of the tenant, handle the check in and handover of the rental property, prepare a property inventory and schedule of the property’s condition. The owner can enjoy the benefits of owning a rental portfolio without the work,” says van den Berg.

She concludes by saying that if handled in the right way from the beginning, with ongoing professional management, many unnecessary and unpleasant situations can be avoided. Taking the right measures from day one will make all the difference to those who wish to own a successful rental portfolio.


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