Three tricky situations landlords can avoid

Whether you are a well-established landlord or are still thinking of getting in to the game, there are some pitfalls that might trip you up.

Natalie Muller, regional head of rentals at Jawitz Properties Western Cape, offers some tips.

“By now most people have heard of the popular private letting site, Airbnb, including tenants. Holidays at the end of year are just around the corner, making now a tempting time for tenants to consider subletting either a room in your property, or your entire home without your knowledge.

“This could be a lucrative opportunity for tenants to supplement what they pay in rent but without your permission. This is simply not okay. If you live far from your property or rely on a friend to manage it for you, short of keeping a constant eye on Airbnb listings, it can be difficult to check that your tenants aren’t taking advantage. A managing agent should regularly check in with tenants, talk to them and should pick up if anything is amiss, such as subletting going on without your permission.”

She says the Western Cape in particular is a desirable destination for foreign tenants, but how do you vet them to make sure you can actually rent to them safely?

“Although there are foreigners with permanent residency, or those on sabbatical or study leave, often 90 days is the term of a visitor visa, and it is not unheard of that tenants can bend the truth to get into a rental property, only to fly away in breach of the lease.

“It is absolutely essential to check their credentials from their bank details in their country of origin, to make sure they are creditworthy. Relying on these means and references, however, might not be enough. Managing agents should help to properly screen prospective foreign tenants and to search for them on social media, for example, to ascertain their character and who or what they are associated with. The most thorough screening protects you from losing out on rent and being faced with trying to seek recourse with an absconding tenant who has left the country altogether, and left you in the lurch.”

As landlords can no longer put utility bills into the names of tenants, it is often more cost effective to install prepaid electricity metre. However, Muller says that if you don’t keep your other utility bills paid up to date, when a tenant puts in prepaid electricity, part of it can be deducted due to arrears on your accounts.

This of course is unfair to the tenant and could result in them attempting to claim compensation or withholding paying rent until you address the problem and settle your bills. Tenants may not withhold rent at any time for any reason and doing so would affect their credit ratings.

“More important, for you, your cash flow would be negatively affected, so it’s essential for your own creditworthiness to pay your utility bills. Managing agents are the go between, and a middle man can be helpful if there are sensitive issues like this to deal with. By keeping communication lines open, managing agents can keep tenants and landlords informed and make sure problems are reasonably resolved or avoided altogether,” says Muller.

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