select
|

What you need to know when renting out your property

Owning a property and leasing it to a tenant can be mutually beneficial arrangement for both parties, provided the landlord adheres to a few key principles from the start when selecting a suitable tenant, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
 
He notes that due to South African legislation, selecting the right tenant can be a rather complex process. However, there are various ways that landlords can ensure that they are protected from the risk of delinquent tenants and choose the best possible tenant to occupy their property.
 
According to Goslett, the first thing that a landlord should do before they advertise their property is to determine the conditions of the rental agreement. “It is important that the landlord is specific about what they want when it comes to the conditions, such as no pets or that a tenant that is non-smoker. Another essential aspect is to stipulate in the advertisement that all potential tenants will be thoroughly screened. This will have a significant impact on the number of potential tenants who decide to view the property, narrowing the selection down to only those who meet the landlord’s criteria,” he says. “To further narrow the selection, landlords should also provide potential tenants with a detailed application form to be completed. The document should request personal information such as employment details and contactable references. Tenants can also be asked to provide supporting documents which would include a copy of their ID and a salary slip to verify employment and affordability.”
 
Goslett notes that once the landlord has received the application forms with the required supporting documentation, they can then proceed with a credit check and criminal record check. Part of this stage of the vetting process would include contacting the references given by the tenant.
 
Once all the checks have been completed and a tenant has been selected, Goslett says that it is important that the landlord draws up a comprehensive and legally sound lease agreement with all conditions specified. “The terms must be agreed upon and signed by both parties. The more detailed the document, the better. This will avoid any confusion or uncertainty regarding each party’s obligations in honouring the agreement. The agreement should include a pre-occupation inspection report to be concluded with the tenant present, along with details regarding aspects such as the deposit, rental amount, maintenance and upkeep. Time frames should be allocated to the required clauses as well as penalties, should any condition be breached,” says Goslett.
 
He notes that it is important to remember that although a lease agreement has been agreed upon and signed, the property it is still ultimately the landlord’s responsibility. “If a tenant fails to pay a utility account that they said they would, the landlord is the one who will face the consequences in the long run. Landlords should always be aware of what is happening with their property and make sure that the accounts are paid and up-to-date. Certain measures can be taken to minimise the risk posed by a defaulting tenant, such as prepaid electricity and water meters, for example. If this is not an option, a deposit for these accounts can be agreed upon beforehand,” says Goslett.
 
While it is important to be respectful of a tenant’s rights and their privacy, it is advisable that landlords conduct regular inspections of their property. “It is essential that the inspections are at the tenant’s convenience, making sure that any issues or breaches in the contract are dealt with as soon as possible. If problems are left, they could end up costing a lot more to rectify or sort out. For example, if the landlord does not address late or non-payment immediately, within a short space of time the tenant could be a few months behind and incurring further utility costs. Aside from the escalating costs, the landlord may have to institute legal action in order to get the tenant removed from the property, which will also be a costly and time-consuming exercise,” explains Goslett.
 
He notes that a professional rental agent is a good option for landlords who don’t have the time to manage their rental portfolio. “For a percentage of the rental income, an experienced, reputable rental management agent will have the expertise and resources to ensure that the property is managed in the correct manner. This is a small price to pay considering the many benefits of using a professional management agent - not only will they assist the landlord with tenant selection, reference and credit checks along with the day-to-day property management, but they will also be up-to-date with the latest legal and regulatory developments to protect the landlord,” says Goslett. “Rental agents will have procedures and systems in place to professionally avoid any potential problems and deal with any disputes that may arise. If necessary they will also have access to the legal resources and experience to deal with any situation efficiently.”
 
If a rental property is handled in the right way from the beginning, with ongoing professional management, many unnecessary and unpleasant situations can be avoided. “Taking the right measures from day one can be the difference between a landlord in trouble and one whose buy-to-let portfolio is not only producing a regular income, but is also growing in capital value,” Goslett concludes.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
        
    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