select
|

New year, new lease? Get a new credit report

If you’re a residential landlord currently renewing any leases, you really should insist on a fresh credit check on your existing tenants before you sign anything – and perhaps even consider asking them to top up their deposit.
 
That’s the word from Chas Everitt Property Rentals CEO Greg Harris, who notes that even if your tenants have been good payers up until now, everyone’s budget has been put under strain in recent times by the rising cost of living, and many consumers have been taking on additional debt in order to cope.
 
“They may well have more credit card debt or more store debt now than they did when they first moved in – especially after the festive spending season. They may even have taken out a new personal loan and, with an interest rate rise imminent now because of the low value of the rand, that could spell trouble.”
 
He explains that the rate rise will mean that the monthly repayments on all these debts go up, and that since medical aid subs, insurance premiums and school fees all usually go up in January too, many people, including tenants, could start finding it very hard to make ends meet in the coming months.
 
“As it is, the latest figures from the National Credit Regulator shows than only 57,7% of credit-active consumers are in good standing, while more than half (53%) of all the new applications for credit now being made are being turned down. This indicates that many prospective borrowers are already considered by credit providers to be over-indebted.
 
“What is more, wage and salary increases are expected to be very modest in 2016. And in the current climate we are not expecting any personal tax breaks to make life easier for consumers. In short, landlords’ rental incomes are likely to be at greater risk as this year advances, so a careful review of their tenants’ financial position is a good idea.”
 
In fact, Harris says, even if their credit reports are good, tenants’ employment or employment prospects may well have changed in the past year or two, so landlords should probably ask their managing agents to also request three to six months’ bank statements and an employer’s reference, just as they would do with a new tenant.
 
“And finally, it would be a good idea for your agent to conduct a new inspection of the property to see if it has been kept in reasonable condition during the course of the previous lease. This should of course be done with the tenant present, and a condition report or inventory should then be signed by both parties and attached to the new lease to prevent any future disputes over damages and deposits.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      The forecast for the national rental market in 2018 remains a mixed bag of good news and bad news. Although rentals are expected to rise slowly as the challenges of home affordability and tighter lending criteria tighten their grip, it’s a double-edged sword as the market also will come under increasing pressure from factors like declining disposable income levels.
    • 14 Feb 2018
      While you may not have intended to place your home on the market, what do you do if you receive an unexpected offer on your home? In areas where demand outweighs the current supply of homes available to buyers, it is not unheard of to have buyers make offers on homes that aren’t on the market, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      If you are looking to sell your home this year, Debbie Justus-Ferns, divisional manager of Renprop Residential Sales, says that there are five crucial things to do before the ‘for sale’ sign goes up.
    • 01 Feb 2018
      February is the month of love and to celebrate we will be posting about all the things we love this month. Follow the #MyPropertyLoves hashtag to keep up with our favourite things.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK