Real Estate Investor Magazine South Africa November 2019 | Page 33

A
ccording to the latest General Household Survey re-
leased by StatsSA, about 3,4m households in South
Africa are currently living in formal rental accommo-
dation. There are not enough property owners with the spe-
cialist knowledge or time on their hands to manage these
properties on their own. Managing agents are already com-
pliant with the provisions of all the relevant legislation and
have access to systems and information that enable them to
pre-qualify tenants properly. decide for yourself, you should preferably choose an agent
who already manages a portfolio of rented accommodation
and can provide references from other landlords.
“We would be willing to bet that the vast majority of them
[rental properties] are in private hands and not owned by big
property companies or developers. In fact, in our experience,
most landlords only own one or two rental properties, with a
few avid buy-to-let investors having a portfolio of 10 or more
units,” says Gerhard Kotze, Managing Director of the RealNet
estate agency group. “By hiring a letting agent, you put a
buffer between yourself and the tenant
in the event that there are problems.
You don’t have to listen to excuses,
chase down rent, or be the ‘bad guy’ if it
becomes necessary to evict the person
living in your property”
“However, managing any number of rental properties, and
tenants, is becoming ever more complex. Not only because
of the current tough economic circumstances but because of
the ever-increasing amount of legislation relating to property
rentals. There are not many private investors/ owners with the
specialist knowledge or time to get on top of all this,” add Kotze.
More and more property owners are realising that they
need help from properly qualified and experienced letting
agents who are already compliant with the provisions of all the
relevant legislation and regulations. “Depending on optional
services and matters related to maintenance, a letting or
managing agent is usually paid around 10% of the monthly
rental, but most landlords find that this is not a high price to
pay for the peace of mind that comes from knowing that there
is professional property practitioner in charge of their leases,
tenants and, if necessary, the maintenance of their rental units.”
Benefits of a managing agent
The two major advantages in working with a good letting
agent are undoubtedly better tenant selection and better rent
collection, says Kotzé. “Professional letting agents have access
to systems and information that enable them to pre-qualify
tenants properly, so that there is a much lower risk of you
ending up with a tenant that is a bad payer or likely to damage
your property.
“In addition, by hiring a letting agent, you put a buffer
between yourself and the tenant in the event that there
are problems. You don’t have to listen to excuses, chase
down rent, or be the ‘bad guy’ if it becomes necessary to
evict the person living in your property. Agents also have
an advantage because tenants usually realise that they,
unlike the owner, are just doing their job and are obligated
to enforce the lease terms.”
How to select the right managing agent
The real question then becomes not if you should appoint a
letting agent but how to select a good one, he says. “And a
personal recommendation is always great, but if you have to
“Next you should make sure your agent is registered with
the Estate Agency Affairs Board (soon to be the Property
Practioners Regulatory Board of Authority). That they have
a trust account for clients’ money and that they only take
commissions from landlords (not from tenants).
“It is also preferable that the agent or agency is a member
of a national real estate group, as this improves the chances of
the agent using tried and tested rental property management
systems, and being able to keep up and comply with new and
changing laws and regulations pertaining to rental property.”
“The fact that there is a ‘big brother’ organisation behind the
agent will also be to your benefit as it significantly lessens the
chances of any unethical behaviour,” adds Kotze.
Letting mandate
Once you have made your choice of agent, it is likely that you
will be asked to sign an agency agreement or “letting mandate”
that covers the agent's right to let the property on your behalf
and manage it during the tenancy – and that you must make
sure that you read this, and sign it only if you are sure that you
understand and agree with every part of it.
“Similarly, you should check out the lease agreement your
agent will be using and make sure you are comfortable with it –
bearing in mind that the agent will be your legal representative
in all his or her interactions with your tenants.
“However, once you’ve done this and everything is in place,
it will be time to let go and let the agent do what you are
paying them to do. An experienced letting agent will know
how to find and vet a suitable tenant. They will ensure that
an adequate deposit is paid before they all the property to be
occupied and will also react quickly and correctly if the rent is
not paid promptly or if repairs are needed.
“In addition, they will keep you properly informed of all
relevant matters and be able to propose quick and legal
solutions to any problems.”
SOURCE RealNet
SA Real Estate Investor Magazine NOVEMBER/DECEMBER 2019
31