Although Hout Bay in Cape Town has a strong rental component to its real estate market, many landlords don’t use the services of an estate agency to manage their rental properties.
Even though becoming a landlord can have a monetary reward, provided the right tenant has been selected, Barry says it is important for homeowners considering becoming landlords to know that being a landlord is not a straightforward 9 to 5 job.This is according to Janine Barry, Broker/Owner of RE/MAX Home, who says many landlords have very limited knowledge on the ins and outs of the intricacies of managing a rental property and tenants.
Barry says rental agents can make the whole process stress-free for landlords by finding the right tenant and handling all the issues on behalf of the landlords.
“A rental agent has experience in finding a suitable tenant match for the type of property, has access to all of the necessary tools to undertake a thorough credit check in order to ensure they are placing quality tenants upfront, as well as property management systems to manage the collection of the rent,” she says.
“Most agencies that offer rental solutions will be able to set up a debit order to collect the rent timeously, as well as a substantial database of quality tenants who they would be able to place in the property.”
Barry says even though the financial returns on rental properties can be appealing, there are certain things that homeowners should carefully consider before they rent out their home.
“Before taking the leap and becoming a landlord, homeowners really need to make sure they understand the risks and rewards associated with renting, and then decide if they’re ready to take on the role of landlord,” she says.
Adrian Goslett, CEO of RE/MAX of Southern Africa, agrees, saying that owning a rental property, or portfolio of investment properties, can be an excellent way of earning additional income or making a living, however, being a landlord is not for everyone.
“While renting out property can be a feasible, income-generating endeavour, there is more to being a landlord than simply signing a lease agreement and collecting a cheque.”
Even though becoming a landlord can have a monetary reward, provided the right tenant has been selected, Barry says it is important for homeowners considering becoming landlords to know that being a landlord is not a straightforward 9 to 5 job.
“A landlord must be able to deal with a variety of issues, from knowing and following the law, to dealing with maintenance and managing the financial aspects of what is, after all, a business venture.
Before renting out their property, Barry emphasises that landlords should be careful to choose an estate agency that is knowledgeable about the rental housing laws, including the applicable portions of the Consumer Protection Act dealing with leases and the rights of the tenant.
Another point to consider, according to Barry, is the fact that homeowners must be prepared for maintenance and emergency repair costs to ensure that their property stays in a good state of repair.
“We have, on occasion, seen the case of ‘bad landlords’, who do not want to maintain their property,” says Barry.
“Homeowners who want to rent out their property should also bear in mind that it sometimes takes longer than expected to let the property. They should therefore plan and work out their finances carefully to determine whether or not renting the house will be a profitable exercise,” she says.
Once a homeowner has decided to rent out their property, it is vital that they select the right kind of tenant.
The top five things they need to do when screening a tenant, according to Barry, are:
- Run a full credit check.
- Verify the applicant’s income.
- Obtain and check references from their employer and former landlord.
- Request a certified copy of their ID document(s).
- Scrutinise their rental history.
Barry’s final piece of advice to those looking to place tenants in their rental properties is, aside from the normal tenant screening procedures, to use the internet to find out more details about prospective tenants.
“Don’t give in to desperation, take your time and make sure you choose a reliable and trustworthy tenant. The success of your rental property depends on it.”
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