When the going gets tough, the tough get an agent

Economically we are in a time of fear and uncertainty and many of us will be looking for ways to offset financial risks. Landlords should be aware that renting a property out while lucrative, now comes with even more risk as the economy impacts affordability for tenants. While a managing agent’s assistance means paying extra costs for this service, having an agent in your corner could be the best way to protect yourself and your pocket.

“High risk tenants will become more exposed, but we are even finding that some outstanding tenants – those who always pay on time- are starting to default, as circumstances change economically,” says Natalie Muller, Regional Head of Rentals for Jawitz Properties Western Cape. “Salaries are not necessarily being increased, or by as much, while everything else goes up in price – it is a difficult time.”

There is an option just to vet

The vetting process of tenants, even at renewal stage, as well as throughout their tenancy is essential, and while some landlords may want to manage a rental themselves, they can come to estate agents for assistance in vetting a tenant only. The vetting costs are initially covered by the tenant but for a nominal fee, an agent can monitor the tenant on the landlord’s behalf. “This is definitely an option, but of course having an agent manage your rental property in its entirety comes with even more benefits.” Muller adds.

Managing agents handle all dealings with tenants from the rental payments, follow ups and deposit managing, to inspections and liaising with tenants on any matters. “We assist landlords in checking that their tenants are keeping utilities up to date and are able to see at any point how a tenant is managing – are all their bills paid on time, for example, because they might be paying rent but defaulting elsewhere,” she adds. “But beyond a regular credit check, we also vet a tenant’s employer to find out if the employer sees the tenant remaining at the company for some time. We get the full picture, so we can be sure the right tenant is put in place, and only remains in place if they should be.”

Landlords with mortgage bonds relying on rental income to cover bond re-payments would be wise to consider an agent who can make sure that appropriate tenants are in place. “If your tenant defaults in these types of situations, it is even more difficult. There are also insurance policies that we can offer landlords as part of managing the rental, which add another level of security,” Muller says.

High demand for safety and entry-level rental space

Those who are able, may convert large rooms or staff quarters on a property into living space that can be rented out. There is huge demand in the entry-level rental space, where in some areas landlords are seeing a return of 3.5 – 7.5%. “A converted room with a shower and loo in the Southern Suburbs in Cape Town may go for as much as R5500 or R6000 per month, depending on the exact circumstances. Of course, location is a factor here, but so is security. Landlords may even find that installing better security features is going to attract and sustain the right type of tenant as well,” she says.

As a strained economy can breed opportunistic crime, security features, Muller believes, are really going to become essential requirements. “These improvements will cost to install and maintain, making it all the more important to preserve and ensure your rental income, and the best way to do so, would be to have a managing agent involved,” she concludes. 

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 23 May 2018
      The importance of correctly pricing a property for sale is more imperative than ever. This is according to Debbie Justus-Ferns, divisional manager of Renprop Residential Sales, who says that despite this crucial selling fact being emphasised so often, in the current market, many sellers are still expecting unrealistic prices for their homes which is having a negative impact on the ultimate sale price.
    • 22 May 2018
      Extreme weather appears to be the new normal, evident by the volume of insurance-related disputes reaching the industry watchdog’s desk. To avoid a situation in which your insurer refuses to pay up, you should proactively ensure that your home is well-maintained and ready for whatever winter has in store.
    • 22 May 2018
      As the impact of technology on the real estate industry becomes more significant, it is clear that there is a need for an objective look at not only traditional real estate models but also online and other alternative low-commission real estate agencies, to examine what they offer and what their impact might be.
    • 22 May 2018
      According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, dealing with some sort of neighbour dispute is an unavoidable part of life unless, perhaps, you choose to live on a remote small holding for the rest of your life.
    • 22 May 2018
      Buyers feel that they are getting value for money in the Northcliff area without having to compromise on aesthetics and amenities
    • 21 May 2018
      Secure living is one of the growing property trends in South Africa and Nooitgedacht Estate in Stellenbosch certainly ticks the right boxes for buyers who want a secure, exclusive lifestyle in one of the Boland’s most sought-after estates, says Pam Golding Properties.
    • 21 May 2018
      With sectional titles growing in popularity, an increasing amount of homeowners simply do not have the garden space to install a tool shed in their backyard.
    • 18 May 2018
      Home improvements are a great way to add value to your property, but not all of us have bottomless pockets for a full-on renovation. Lucky for us, there are plenty of affordable DIYs that can spruce things up over a free weekend.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us