Real Estate Investor Magazine South Africa October 2018 | Page 32

PROPERTY MANAGEMENT
Five Things
every rental agent has
to monitor obsessively
BY EDITORIAL
J
ohette Smuts, Head of Data and Analytics at PayProp,
says that one of the biggest responsibilities of estate
agents today is the entrustment of clients’ funds and as-
sets. “Managing a rental book means that an agency is taking
responsibility for the financial and physical management of a
landlord’s asset – a property.”
  As the largest processor of residential rental transactions
in South Africa, PayProp says that the industry is often
characterised by an obsession with deal flow and growth
– which means that other important tasks might be
overlooked once in a while. Smuts offers a few reminders
on the administrative tasks that are vital to ensure the safe
management of trust funds and rental portfolios:
Reconcile damage deposits down to tenant
level
Too often when we ask agencies how they keep track of their
deposits, the answer is that they check the bank balance every
now and then to make sure the money is still there.  This
strategy is possibly worse than not checking at all, because
it gives the agency false confidence in the result.  Agencies
need to, in our view, be able to reconcile the total deposit
amount that’s actually in the bank back to each individual
tenant.  In this way it is easy to spot tenants who do not have
deposits or cases where the deposit is vastly smaller than the
rental amount.   Often, deposits are used incorrectly to fund
rental shortfalls or to pay for some maintenance during the
lease – but lax administration means that these funds are never
replenished.  Just looking at a bank balance to confirm that it is
vaguely the same as last month will not show these anomalies.
Compare arrears, invoice and deposit values
weekly
Arrears collection is possibly the worst part of being a rental
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OCTOBER/NOVEMBER 2018 SA Real Estate Investor Magazine