Good Tenants: A Dying Breed?
Investing in property is one of the key fundamentals for building wealth. If it’s your own home, best to make that choice as early as possible to reap the benefits of long-term property price rise. However, if buying in addition to your home and seeking to grow your investment through time and rental, there are several issues to keep in mind before making this decision.
These are difficult to find. Mostly, your good tenant has a regular job, reasonable salary and a sense of stability and responsibility. They may prefer to rent or be planning to buy. Often your good renters are younger people – some as young as early twenties – who are looking to eventually buy. These are your interim renters who will plan to move to their own property as soon as possible. Today’s young renters are wise enough to know that rental is money that cannot be recovered, while paying a bond means investing in themselves and their future.
While your good tenant may choose to rent rather than buy as a lifestyle choice, tenants you would have to be wary of are those who seem unable to plan their lives to include security of tenure – or who have fallen on bad times for one reason or another. Both can mean danger signs for your rental property. Their lives are often threaded with instability, bad debt and lack of vision. Many renters may be thoroughly honest and diligent in payment – however there are others who may present the following warning signs:
- Failing to pay rent on time (or at all)
- Smoking in the property (where this is prohibited in terms of the lease)
- Keeping a pet without permission
- Damaging the property
- Making alterations to the premises or redecorating without permission
- Changing the locks
- Causing a disturbance or annoying the neighbours, i.e.: drunk and disorderly, domestic disputes
- Sub-letting a room without notification
- Failure to take care of the garden.
What to do when difficulties arise
Communication is key in maintaining a good relationship with your tenant. And keeping an eye on things is part of that interaction. Always respond to tenants’ complaints promptly and efficiently. There is no point in causing tension over matters that may clearly be your responsibility. Living with poorly working plumbing or electricity can be very frustrating for the tenant, particularly when he or she is paying significant rent.
Likewise, you need to engage tenants politely but firmly should there be issues they need to attend to on their side. Legal disputes can become expensive, so open and rational discussion should precede any serious steps that may be unpleasant and costly. Most reasonable tenants would rather work with a mutually beneficial agreement than find themselves evicted. In addition, finding new tenants is a tedious and expensive business – so sometimes you may need to bend a little and be lenient with regard to certain requests. Better the devil you know, than the devil you don’t.
How to protect yourself as the owner
Your rental property is a business investment – and while your tenants may have a different lifestyle – they are paying you for the use of your property. Even if they are not causing damage or disturbance, you still need to nurture a good relationship and protect yourself with some vital steps:
Screen all potential tenants: You will need to ensure a credit check, and screen for a criminal record, and past evictions.
Leniency in payment: This is generally a mistake an amateur landlord will make. Do not accept these types of request. Once late payment is allowed, it can become a monthly annoyance. Not to mention later and later, until the issue becomes inflamed. So, say no from day one.
Legal Agreement: Put everything in writing – beginning with a written contract signed under the advice of a rental agent or solicitor. Lease dates and signatures – as well as rules and regulations should be clearly stated and agreed to. Writing your own agreement is rarely advised. Any changes to the agreement or complaints should always be in writing.
Regular Inspections: No matter how pleasant your tenant seems, you need to inspect your property regularly and always at the convenience of your tenant. After all, it is their home and they have a right to privacy. So, if your visits are regular and forewarned, you will find that the tenant will be far more likely to follow the rules.
Be Informed: There are increasing changes to legal requirements with regard to both landlords and tenants, and you need to keep up to date and within the law at all times. Keeping your tenant abreast of issues is also a good way to keep communication and cooperation alive and well. Either way, claiming ignorance of the law will not help you should a court case arise for any reason.
The Leapfrog Property Group
Owning rental property for investment purposes is still a good option – but you will need knowledge, good interpersonal skills, and professional support and advice at every turn. Leapfrog Property Group offers a fresh and innovative approach to buying, selling, renting and property investments, ensuring the best property deals for clients across South Africa.
We delight in challenging the norm, being different but also striving to be better. You will find our approach bold and spirited, driven by heart, generosity and honesty. Armed with our combined credentials, we are the bright face of excellence in the South African market – always pioneering for improvement and certainly set to shake things up!
Find us at: www.leapfrog.co.za
Author: Leapfrog Property Group