select
|

Landlords be careful

The latest Rental Payment Monitor from the Tenant Profile Network reports that 32% of tenants pay their rent late. The first quarter of 2012 saw only 68% of tenants pay their rent promptly, while 8% of tenants made a partial payment, 13% paid late and 11% did not pay at all.

According to the Report, in the under R3000 per month rental bracket just 58% of tenants are paying on time, with 72% of tenants paying on time in the R3000 –R7000 per month rental bracket. In the R7000- R12 000 per month rental bracket, 71% of tenants are paying on time, while in the R12 000 plus per month rental bracket only 61% pay their rent on time.

In today’s economy people are struggling to pay their bills and many may incur a black mark against their names. Impaired credit records are common, with 46.2% of consumers considered to have such records. Francois Venter, a Director of Jawitz Properties advises landlords to protect themselves by thoroughly considering the financial background of prospective tenants.

“A full credit check gives insight into how tenants manage their financial affairs, and a reference check with their previous landlord helps you find out if they paid their rent on time and kept the property in good condition,” he says. Venter further advises that it is also essential to get employment confirmation and an income check from a prospective tenant’s current employer. “A general rule is that the rental amount should be no more than 30% of the tenant’s gross income.”

In the event that prospective tenants are employed on a contract basis, the lease agreement must be aligned to the employment contract. For self-employed individuals and companies, it is vital to obtain audited financial statements from a registered accountant.

He further strongly advises that landlords re-check their tenants credit records, employment status and proof of income each year when their leases are renewed, as people’s financial positions can change rapidly in the current market.

Some tenants with an unfavourable financial history have been known to try to cover their tracks. The Rental Payment Monitor reports that more and more such tenants are targeting private landlords and submitting fraudulent applications in the form of falsified identity documents, or false proof of payment among other scams such as applying for a residence in another family member’s name, or submitting altered utilities bills.

If a tenant’s credit check comes up with any questionable results, Venter advises that a larger deposit or more than the first month’s rent be taken upfront, or perhaps agree on a shorter lease period. Landlords can also opt to use a rental agency which, as part of their service, will do thorough background checks before a tenant signs a lease or moves in.

Venter does, however, advise that landlords be realistic and anticipate that tenants with perfect records are hard to find. “With the help of a good rental agency, it’s possible to manage these risks which will not only benefit a landlord financially in the long run, but also deliver some peace of mind.”



  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 24 Nov 2017
      Demand for secure estate living in Hout Bay has risen sharply in recent years, precipitating a spike in development with estate homes now accounting for 20.24% of the property landscape with the launch of an exclusive new gated development on 26 November adding 20 more units to the existing 1250 estate homes.
    • 24 Nov 2017
      There are some things that money can’t buy – spectacular views from Mouille Point to the V&A Waterfront and a trendy and lively neighbourhood that encapsulates the very best of the Cape Town lifestyle.
    • 24 Nov 2017
      Tshwane’s four-bedroom Mayoral mansion, nestled among ambassadorial residences in the upmarket suburb of Muckleneuk, fetched R5.1 million after spirited bidding at High Street Auctions’ final sale of the year.
    • 23 Nov 2017
      Reserve Bank Governor, Lesetja Kganyago, said that the Monetary Policy Committee had once again decided to let the interest rates remain unchanged with the repo rate at 6.75%, and the prime lending rate at 10.25%.
    • 23 Nov 2017
      As the holiday season approaches, most of us are counting the days until that year-end bonus hits our account. There’s nothing quite like a little bank balance booster to get us in the holiday spirit.
    • 23 Nov 2017
      The Adelphi Centre (now entitled “ARTEM") in Sea Point, Cape Town, is being extensively renovated, and once complete will offer an ultra-luxurious galleria style shopping centre unlike any other seen on the Atlantic Seaboard or in Cape Town.
    • 23 Nov 2017
      If you are looking to sell your home in today’s real estate market, there are certain things that you need to include both inside and outside your house. Today’s generation of home buyers is looking toward a more eco-friendly, energy and water conscious home, and if your house stands out then you are more likely to be able to sell it.
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
        
    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