“As a landlord, you are essentially giving a stranger the keys to your property,” writes Erin Eberlin in her article, How to Select the Right Tenant for Your Property, “Taking the time to select the right tenant for your property is an important way to protect your investment.”
Every landlord should know how vital it is when choosing what kind of personality to lease their property too. Knowing what to look for, or at, when interviewing prospective tenants can be a long-term money-saver. Full disclosure can help you decide when it is acceptable to make rental exceptions and abatements. There is even the option of choosing the right Rental Specialist, like Go!Letting Property Rentals, who can handle difficult tenants on the ‘less confrontational’ owner’s behalf.
Landlords that are new to the letting industry can easily fall prey to tenant traps and empty promises. This is a recurring problem, especially for first-time property investors, as it can lead to dangerous dips in cashflow.
Eberlin lists 6 rules that any novice landlord can put to great use when selecting their next tenant/s:
1. Adhere to the fair housing rules (of your area)
2. The Right Tenant Has Good Credit
3. Perform a Criminal Background Check
4. Check Out Their Rental History
5. The Right Tenant Has a Consistent Lifestyle
6. Look for a Maximum of Two People Per Bedroom (to ensure reasonable human living conditions.)
These rules can definitely help landlords play it safe. Nowadays eviction is not as simple a solution to ‘difficult tenants’ as it used to be. The legal system protects tenants in SA to a great degree, which means that lost rental income and legal costs involved in a difficult or protracted eviction will be very damaging on your investment.
“No one may be evicted from their home, or have their home demolished, without an order of court made after considering all the relevant circumstances,” as written in the Constitution of the Republic of South Africa, 1996 (Section 26, nr. 3), “No legislation may permit arbitrary evictions.”
Todd Millar identifies 5 Steps to what he calls “the Perfect Tenant Experience” in his article, Finding the Perfect Tenant: Devil is In the Details Part #3:
1. Advertising – Using the internet has proven a much faster and cheaper resource than that of newspaper classifieds. Having attractive, but honest, photographs with the advertisement of your rental property will attract more people than a property with no visual proof.
2. Screening– As Eberlin’s rules 2 to 5 insists; Do a credit, criminal, rental history and lifestyle check on the prospective tenants you are considering. Remember not to settle for a tenant you are not comfortable with just because your property has been vacant for longer than anticipated. Tenanting is a long-term property decision and you should be happy, and confident, about all your property decisions.
3. Leasing– Remember that you can have a lease contract that can cover any and all policies and rules to your liking, but do not forget that the Constitution and the Rental Housing Act outweighs any lease agreement. Speak to your lawyer or rental agent about what rules and points you want in your contract and inquire about the legislatives that govern property rentals in your area, like the Rental Housing Tribunal of the Western Cape, South Africa.
4. Inspecting– Inspect the property before the new tenant moves in, inspect it with them when they consider moving in, inspect it regularly as they are living there, and inspect it again with them when they want to move out. Inspections are vital to ensure that the “you break it, you buy it” rule is understood by the tenants. Millar advices that landlords should take snapshots of the entire property to have a documented record of their property’s health status and appearance. Some tenants are more damaging to property than others, this is where knowing their lifestyle can help you eliminate the more damaging.
5. Documentation and Follow up – Document and file everything. Every bill, every warning, every notice, every infraction, because when you do need to appear in court for an eviction gone wrong, then you are covered proof-wise. Remember that the legal system is a bureaucratic room of proof-seekers. No proof, no case, adds to a longer eviction process.
It can be challenge when picking the perfect person to lease your property, especially with human nature, empathy and sympathy governing our minds. Some landlords seem to comfortably manage rental control and tenanting, but for the many that do not, never hesitate to start screening for a great Rental Agency to take care of tenanting for you.
At the end of the day it all comes down to cash-flow and making a profit. Do not forfeit your profit early in the game by making the wrong tenant choice. Rental Agencies, like Go!Letting in Vanderbijlpark (Gauteng), have Rental Specialists that can deal with the specific tenanting difficulties that may accompany different types of properties.