Property Management: 7 Steps to Achieving Peace of Mind
Being a landlord allows you to earn income from your properties. But it’s not always smooth sailing. Here are 7 steps to tackling the risks associated with owning and managing a buy-to-let property:
Step 1: Tenant Vetting
Evictions in South Africa can be time-consuming, difficult and expensive, so great care should be given to the selection and placement of tenants. Vetting is not a simple process of collecting a payslip and running a basic credit check, especially in today’s world where the economic impact of the COVID-19 pandemic is being acutely felt. Your tenant vetting process should be comprehensive and strict. You should research tenant payment behaviours in your area so you know what to expect and what risks you need to mitigate.
Step 2: Comprehensive Contracts
South African law gives important rights and protections to tenants living in rented accommodation. Questions that your contracts should address include ‘what are the obligations of landlords and tenants?’ and ‘are there any rights or obligations that a lease cannot take away from tenants?’. Relevant legislation includes the Rental Housing Act, the Consumer Protection Act and the Protection of Personal Information Act. And you should consider securing access to attorneys for real-time advice and troubleshooting.
Step 3: Rent Collection
Rent collection from defaulting tenants is a particular pain point for landlords. Fortunately, there are things that you can do to help get your tenants to pay their rent on time. These include having open lines of communication and offering incentives for prompt payment. When tougher measures are required you may need a professional to handle them for you, for example charging a late payment fee or reporting the status of rent payments to a credit check bureau or purchasing insurance to protect your rental income.
Step 4: Dealing with Delinquency Promptly
Landlords sometimes resort to evicting undesirable tenants themselves just to find themselves in a far worse predicament than before. Lock-outs, power-cuts and other such tactics are unlawful. The longer a tenant is in arrears, the lower the chance of recovery is.
Step 5: Effective Maintenance & Management
Managing a rental property involves a shortlist of responsibilities that can take up much more of your time than you may anticipate:
- incoming, interim and outgoing inspections, explanation of House Rules, deposit collection
- payment and reconciliation of accounts on a monthly basis, management of deposits (and interest earned in accordance with industry regulations) and monthly rental payments
- property faults, insurance claims and complaints
You need to have systems and resources in place to manage these effectively.
Step 6: Quality Assurance
Clear processes, established routines, standardised documentation and regularly soliciting feedback all help to provide quality assurance. The rental industry is supported by the Rental Housing Tribunal, which moderates tenant and landlord disputes that cannot be resolved internally.
Step 7: Outsourcing to Experts
There is a lot more to managing rental property than what meets the eye. The download below outlines what Just Property offers for both Procurement Leases (where a tenant is sourced and you do the rest) and Management Leases (where everything is handled by your agent). Peace of mind. Delivered.