How to select the right tenant
Property rental is a great way to earn passive income, but it also comes with its own set of associated risks.
READ ALSO: What to do when a tenant wants to keep pets
The biggest of these risks is a defaulting tenant who can end up costing landlords a fortune in missed rent and legal fees to have the tenant evicted.
For this reason, Adrian Goslett, Regional Director and CEO of RE/MAX Southern Africa, said selecting a suitable tenant is key to the success of any rental portfolio.
“Working with a reputable letting agent is the safest and most efficient way to ensure that the selected tenant will not miss a payment or cause unnecessary damage to the property,” he added.
According to Goslett, any reputable letting agent will be trained in how to properly vet potential tenants to ensure they meet the necessary affordability criteria.
This is essential to avoid the costly process of having to evict a tenant who does not pay.
Before beginning the search for a tenant, Goslett stressed the importance of determining the terms of the tenancy agreement, particularly regarding issues such as whether the tenant is allowed to have pets and how many tenants can occupy the house.
“Having a clear idea of what you will and will not allow in rental property will provide more defined search criteria for finding the right tenant for the home.”
For those who prefer to do it alone, RE/MAX of Southern Africa shares some tips to help landlords select the right tenant.
Mention credit checks in ad copy
When listing your rental property, make it clear that each tenant will be vetted and will need to go through credit checks before entering into any rental agreement.
This will have a significant impact on the number of potential tenants who decide to view the property, which can save time and ensure the most suitable fit.
Create a detailed request form
Ask each potential tenant to complete a detailed application form.
Ask for information such as their employment details and contactable references.
Renters may also be asked to provide supporting documents which would include a copy of their ID, payslips and three month bank statements to verify employment and affordability.
Perform a credit check
Documents can be easily forged, so it is important not to simply trust the documents provided by the applicant.
Once the application form with supporting documents has been received, complete a credit check (which can be done through a credit bureau) and a criminal record check (which can be done via the applicant’s SAPS website) and contact the references provided. by the tenant to verify the request.
Write a global lease
After the selection of a suitable tenant, a complete and legally valid rental agreement must be drawn up, which stipulates in detail all the necessary conditions.
The terms of the agreement must be agreed and signed by both parties.
“The process of securing a reliable tenant can be a laborious task, which is why many prefer to outsource the work to experienced rental professionals. Not only will this save landlords time, but it will also minimize their risks, as reputable letting agents are better equipped to properly vet tenants.
“That’s why I would always advise that before anyone advertises a rental home, it’s always best to talk to a local rental professional first and find out how they might be able to help,” said said Goslett.
Also follow us on: