The TPN Rental Monitor of Q4 OF 2013 reports that the behaviour of tenants has changed for the worse in that for the first time in three years there is an increase in tenants paying late and in the “Partially Paid” segment, which could mean that there are many over-indebted consumers who are not able to make their payments on time or in full every month. Although the report shows that the increase is a small amount, these figures can always be seen as a warning sign and to take extra precautions, says Michael Bauer, general manager of IHPC estate agency.
Landlords often have the belief that if they give the property to a few agents to find a suitable tenant, there will be a wider selection from which to choose but this is not always the case. While there are many tenants looking for homes right now, not all of these tenants will be suitable and it is important to place a person who will pay his monthly rental on time, has stable employment, has a good track record with previous landlords and will look after the property as if it is his own, said Bauer.
“We at IHPC prefer landlords to give us a sole mandate to rent their properties out, and not to grant open mandates to many agents,” he said.
If there is only one agent working to place a tenant, there isn’t a “race” to get a tenant placed first and if time is taken to do thorough credit and profile checks there is less chance of a tenant being placed who has a bad track record. Some of these profile checks are necessary and help a great deal, said Bauer.
He mentioned one particular case where a delinquent tenant was listed by their company for non-payment of rent and the tenant seemed to have “disappeared” but three years later the tenant resurfaced to clear the debt. This tenant had been listed on TPN as a bad payer and wanted to rent elsewhere but because he was listed, he had to clear his name before any other rental agent would consider allowing him to rent through them.
There might be many tenants who are eager to submit their applications and pay deposits to secure the lease but it is better for the landlord to take the time to choose the right person rather than take the first person who pays a deposit and submits the completed application forms, said Bauer.
“Rather wait and have the unit stand empty for a short period than rush into a lease with someone that hasn’t been checked out properly. If mistakes are made in choosing a tenant, a lengthy eviction process might follow and loss of much income.”