During an economic downturn markets dry up and liquidity is hard to find. Those with value-generating assets like homes often take advantage of these circumstances as banks aren’t willing to lend as freely as before and renting becomes increasingly popular.
A bear market puts pressure on consumers spending habits and it’s become very clear that many South Africans are feeling the bite of the recession. The forex market has been struggling and the devaluation of the Rand has seen a significant impact on prices of petrol, food and different day to day essentials.
Tenants face the challenge of needing a roof over their heads regardless of the economy and logically rent should be regarded as the most important expense they are faced with.
While Landlords face the same challenges: They are also paying more to live and still have expenses and commitments to meet, often relying on the rent to help cover those costs.
Risk profiling when renting
When renting out your property you also need to evaluate your appetite for risk and those who rent privately (without using a rental agent) often receive more leads mainly because they know property owners don’t commonly conduct as thorough a background check as a rental agent would. However these tenants are often risky and may be more trouble than they are worth.
What are rental agents?
A rental agent is there to ensure your tenant has a clean credit record, do background checks to establish that he doesn’t have a history of habitually defaulting on rental payments and that he earns enough to afford the rent.It’s not surprising that many landlords choose to enlist the specialised services of a rental agent when letting a property. Not only can an effective rental agent assist with the tenant selection process, but they can also help ensure that the landlord receives rent timeously and regularly.
In cases where the property in question is for full management of the property, the rental agent will act on the instruction of the landlord and become involved with inspections and maintenance issues. A rental agent’s involvement with the tenant can vary greatly depending on their directive with the landlord, and it’s important that tenants understand exactly what that mandate entails and what kind of information they should expect agents to disclose.
Why should we use a rental agency?
There are many benefits to having a reputable agent manage the affairs of a rental property. Not only do they have the necessary experience when it comes to leasing agreements, they are fully aware of both landlords’ and tenants’ rights and will have solid systems in place to do background checks on tenants.
The main advantage of employing a rental agent is to be able to make full use of their systems, procedures and agreements, and to have their professional advice available when necessary. Under a managed lease the agent also acts as the middleman in the collection of rent and would be the one to chase the tenant for any money outstanding.
It’s also beneficial for the tenant to work through a rental agency. An experienced agent understands the law surrounding rentals and will advise the landlord of his obligations regarding the maintenance of the property as well as the return of the deposit should a dispute arise.
Where to find rental agents and agencies?
Anyone who deals in property and that includes rentals have to be registered with the Estate Agency Affairs Board (EAAB) and be in possession of a valid (current) Fidelity Fund certificate. Taking into account that rental agents play a vital role in determining who ends up letting the landlord’s property, it’s important for the landlord to select a professional in possession of a current Fidelity Fund Certificate.
A final tip on using rental agencies
Rental agents play a vital role in determining who ends up letting the landlord’s property, it’s important for the landlord to select a professional in possession of a current Fidelity Fund Certificate. While using a rental agency may cost a little more in the form of commission, having checks and balances in place as well as having a correctly worded lease agreement could end up saving you thousands in the long run.
That is why you should always do your research and not be afraid to hire the best in order to get the best results and deal between tenant and landlord.
If you need advice on your eviction case or would like us to represent your case, get in touch with Le Roux Attorneys