Make certain the agent has a track record of assessing tenants’ previous rental and credit history.
With finance for residential property purchases still hard to come by (in some less affluent areas 70% of bond applications are still being turned down), demand for rented property has improved greatly and buy-to-let investors are again evident throughout the Cape.
However, very few property investors are able or willing to find and manage their tenants themselves. They have, therefore, to rely on rental agents to do this for them – for better or for worse.
Rental agents like any other group, vary greatly in dedication and ability: some are excellent, others really should not be in this line of work.
This being the case, before an investor appoints a rental agent, he should make certain that that person has a track record of checking on and assessing tenants’ previous rental and credit history. Any tenant who has been blacklisted by credit bureaux should be suspect as should any who have fallen behind on previous rent payments or been disruptive in their communities.
In today’s rental market some buy-to-let investors favour gated communities and sectional title schemes because these maintain standards. They are (usually, not always) well managed by bodies corporate and managing agents, tend to be more secure and able to apply some control on residents’ behaviour.
If and when a tenant misbehaves some bodies corporate have the right to impose substantial fines and to double and treble these and charge compound interest if they are not immediately paid.
However, a tenant who is fined, say, for rowdiness late at night, or for blocking drains or for leaving broken windows or doors unrepaired, will often not pay the fines, and the landlord, seeing these fines mount up month by month, will be forced to pay them. It is, of course true that the tenant’s one or two months deposit can be seized to cover these outlays but with this type of tenant the full deposit – and more – will often be needed to rehabilitate the unit when his lease has expired.
It is far better, therefore, to leave a unit untenanted than to accept a tenant over whom there is a question mark – but lazy or greedy rental agents will often do this and will later make matters worse by not reporting problems to the landlord and by neglecting to submit detailed monthly report backs and accounts.
The moral of the story, therefore, is Yes, buy-to-let is a good field to be in right now but be very careful about the rental agent you choose – and if his or her principal is not a good administrator (many agencies’ principals loathe this side of their work), look elsewhere for your rental management service.