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Letting property: Tips to ensure success

The key to successfully letting one’s property is to be thorough in the selection of a potential tenant, as well as to be clear from the very beginning as to what is expected from both parties- the tenant and the landlord.   

According to Richard Gray, CEO of Harcourts Real Estate South Africa, “It is always advised to draw up a lease agreement that is in writing as opposed to a verbal lease agreement. Although both forms are legal, the former serves as confirmation of all agreements concerning the property. Should the need arise, the lease agreement will have stipulations that will be able to clear up any confusion, either on the behalf of the landlord or the tenant.”

In circumstances where the property has more than one occupant, it is recommended to contract all the members, and stipulate that all are personally accountable in regard to the lease agreement. If the property is to be used by a company, it is best to include all directors in the drawing up of lease agreement.

When choosing a potential tenant it is vitally important to ascertain their credibility.
This would be ensured by checking that they have permanent employment, as well as where they work, what position they hold and the period of time that they have been in the job.  Their income would be of interest in determining whether they are able to meet the cost of rent on a monthly basis. It is also advised that they are checked through the Credit Bureau to determine whether they have a sound credit rating.

Never rent out a property without the demand of a deposit. This will ensure that damages incurred to the property during the lease period are essentially covered, with the money not having to come from the landlord’s own back pocket. “Before leasing out the property, prior defeats should be noted in the company of the owner and the tenant, as well as listed in the lease agreement so that no blame can be cast when the lease comes to an end. Regular inspection of the property by the owner should be performed, with tenants given ample notice of when a visit will occur,” states Gray.

The best way to obtain rent money from a tenant is to obtain consent for payment in the form of a monthly debit order. If this form of payment is not used and the tenant continuously misses rent payment, make sure that all legal rights are first known before taking up the matter with the tenant in question. It is important to remember that taxes, rates or levy are expenses for which the owner is responsible.

Gray concludes, “A word of advice would be for owners to keep their properties well maintained as this has the added benefit of attracting the right tenant. Remember that although it is important to receive the highest possible income from a leased property, it may come with a tenant that is unreliable. Therefore it may be best to choose a tenant who may not offer the highest return but who will ensure that you and your investment remain secure.”

                                                                                                                                                           


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