The Landlord’s Guide to Finding a Great Property Manager

Consider the following scenario: an ideal investment property is on the market for sale: a three bedroom, two bath, sectional title apartment in a security complex that is clean and in no need of repair. It is located in a good neighbourhood, close to a number of reputable schools and has proximity to the main arterial routes. It should sell like hotcakes. The only problem is that the property has a bad tenant in it who is two months in rental arrears. What can be done?

Do you have a good property manager?

Normally, this is the point when relations between landlords and tenants can sour and when a good property manager is needed. Ideally, the property manager should be actively pursuing the rent with the delinquent tenant and increasing their communication with the landlord to give them regular feedback and confirm the steps they are taking to remedy the situation.

Unfortunately, this is not often the case. It is not always easy to find the right property management partner, one who can deal with all the small details on an investment property and who is committed to your cause.

When is a tenant an illegal occupant?

As Paul Stevens, chief executive of Just Property, highlights, there is a specific process that must be followed by agents when tenants don’t pay. If the process for eviction must follow, then the Prevention of Illegal Eviction from the Unlawful Occupation of Land Act 19 of 1998 applies. This is also known as the PIE Act.

Tenants are only considered to be illegal occupants if 20 working days’ notice (equivalent to 1 month's’ notice) has been given to them because of a breach of contract and if they fail to vacate the property on or by the requested date.

In this case, the property manager needs to advise such tenants, in writing, that they are in breach of their contract, illegally occupying the property and that further legal action will be taken against them in accordance with the PIE Act.

How can you partner with the right property manager?

Property management goes well beyond just finding a tenant and collecting rent. Multiple property investor, Gordon Mackay, says that he interviews at least three property managers before he makes a final choice in hiring them. He maintains that, for him, price is not the top criteria either. Instead, he asks them about the steps they would take when a tenant cannot fulfill their monthly rental obligation.

When looking to partner with the right property manager, it is also important to find out how many properties they currently have under management and what their average delinquency rates are. At 1%, the Just Property’s default ratio is well below the national average (which TPN places between 5% and 6%) thanks to our strict protocols.

Additional questions to ask a prospective property manager include how tenants are selected and screened, how often property inspections are taken and how regularly the landlord receives these reports. 

When renting out property, bear in mind that the best is to enlist the services of a reputable and qualified property manager or rental agent. It is also important to have contracts that are CPA compliant. Stevens stresses that, “It is far better to use a reputable property manager because there are a lot of legal requirements that govern rental leases which landlords don’t really consider.”

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