GRANT SMEE
There is currently an excess supply of residential rental properties in South Africa . As a landlord , you may be getting desperate to rent out your properties , but you would be well advised to think twice before signing on the first tenant who comes your way .
We speak to property entrepreneur Grant Smee , Managing Director of Only Realty , who warns that taking shortcuts in placing a tenant in your vacant property might help curb your losses in the short-term , but will cost much more time , hassle and money in the long run .
Q1 . What are the obvious red flags that the landlord must pay attention to ? A poor credit score : The COVID-19 pandemic has exacerbated high levels of debt in South Africa , and this will be a prevalent issue for years to come . Prior to signing on a tenant , a thorough credit check should be run . A credit score of 610- plus is acceptable , anything lower is risky .
Affordability : The general rule of thumb is that your monthly rental should not exceed 30 % of your monthly salary . An assessment of a prospective tenant ’ s affordability will give a landlord a clearer idea of a tenant ’ s monthly income and expenses . This should ensure that the tenant has enough income left over to pay their rent , electricity , and water . References : A verifiable reference tells the landlord who the tenant is and if they are reliable or not . If the prospective tenant has no prior rental history , they will need to either arrange a co-signature on their lease agreement or can offer to put forward another credible reference - such as one from an employer .
Q2 . What are the not-soobvious red flags ? Employment history : Employment is hard to come by , however , some prospective tenants ’ short employment histories can tell a worrisome story . Job hoppers or people who often run into trouble in the workplace often display these behaviours in their home life too .
Criminal history : Performing a criminal background check may sound extreme but this is a standard part of the hiring process in many industries and rentals should be no different . Some companies such as TPN provide a SAPS criminal
SA Real Estate Investor Magazine APRIL 2022 49