In today’s economic climate, adding a rental payment to the list of monthly expenses is a tough pill to swallow. It’s usually the largest expense on the list, and to make matters worse, tenants are required to pay an additional one to two months’ rent as an upfront deposit.
A rental deposit is designed to be used by a residential property landlord once the lease has ended to cover any arrear rental payments, money owing to the landlord or for expenses required to return the premises to its original state.
Colin Habberton, CEO of PayProp Capital says that there is a way around having to pay an exorbitant rental deposit. “There aren’t many people that can afford to pay another one or two times the monthly rental for the sake of their landlords peace of mind.”
Habberton says that PayProp DepositGuarantee, a relatively new offering in the rental market, offers far more affordable payments, on a monthly basis, which provides trusted protection to landlords. PayProp DepositGuarantee is innovative insurance for landlords at a cost that tenants can afford.
“Instead of an upfront deposit, tenants pay the landlord’s premiums under the DepositGuarantee, a much more affordable proposition. Tenants who owe nothing when the lease expires receive a no-claim cash bonus, as well as a Good Tenant certificate,” says Habberton.
Habberton quotes the following example: “Let’s say you rent a property for 12 months at R6 000 per month. You will pay a total amount of just R3 100 for DepositGuarantee and your landlord will get protection of up to R15 000. For protection under the damage deposit arrangement, you would have had to pay R12 000 upfront.”
DepositGuarantee covers all of a landlord’s claims against a tenant at the end of the lease – for up to 2.5 times the monthly rent. Underwritten by RMB Structured Insurance Limited, PayProp DepositGuarantee is revolutionising the way in which protection for damages and loss of rental income is managed in South Africa.
“The more tenants that request the insurance, as opposed to producing a double-rent payment upfront, the more landlords will see the benefits of introducing PayProp DepositGuarantee across their portfolios,” says Habberton.