By Martin Goodman, Director of Rentshield
Property is said to be one of the more predominant long-term investments to get into, due to high return on equity you are guaranteed to receive.
One of the benefits of investing in property is that you don’t need cash up front or saved up in your bank account, as long as you are able to take out a bond with no hassles, buying property for investment purposes can be an easy process.
Some see property investments as a good retirement solution while others see it as a good ROI opportunity by buying and selling property on a continuous basis. Either way the best way for buy-to-let investors to do this is to place tenants in their property to help pay off the bond.
Unfortunately letting out property is not risk free as numerous things can go wrong, especially if you happen to rent your property out to difficult tenants. There are many scary stories of tenants staying in properties for months rent-free, where the landlord is unable to evict them and stories of properties that have been damaged accumulating to thousands of Rands, more than the original deposit put down. I am sure that every landlord who owns multiple properties has at least one or two horror stories of difficult tenants.
The risk of letting out your property is high but there are ways in which landlords can protect their property investments from defaulting tenants. The most common solution is to find the right tenant that pays their rent every month and on time.
When it comes to finding the right tenant landlords need to make sure that the only way to discriminate against someone moving into your property is their ability to pay their rent every month. This however, can only be determined through credit checks that an agency can simply do on behalf of the landlord.
However, credit checks aren’t fool-proof thanks to the new Credit Amnesty Act, as consumers bad credit history, once it has been paid off, is taken off credit bureau records. Leaving the landlord in a vulnerable position when choosing the right tenant.
The only way to protect your property from defaulting tenants is to use property residential letting tools that alleviate the stress of dealing with tenants who don’t pay rent, don’t pay on time or damage your property. Property residential letting tools such as Rentshield help to maintain a healthy relationship between the landlord and tenant because in the case of a slow paying tenant, Rentshield will pay the rent on behalf of the tenant within 48 hours of a claim lodged, at no cost to the landlord. The landlord is then able to pay the bond on time and remains in good favour with the bank.
In the case of evicting tenants due to non-payment of rent, the process is a tedious one which cannot be avoided all the while the bond payments are piling up. The legal process of evicting tenants can be complicated and costly as landlords need a court order before they are able to evict tenants. Turning off the water and electricity to drive out tenants is illegal and it’s important that landlords are advised on the correct procedures. Rentshield will undertake and control the eviction process in full compliance with the Consumer Protection Act and will pay for the legal fees to the value of R50 000 as well as 3 months non-payment.
When vacating the property and tenants have left the place in a worse condition to when they moved in, traditionally deposits are used to fix up the damage. However, because Rentshield offers zero deposit leases to tenants, they will pay for damages of up to one months rental ensuring the landlord is completely covered.
Renting out property doesn’t need to be a challenging or tedious process. Rentshield is there to ensure the protection of residential property from defaulting tenants at every stage.
Written by Martin Goodman, Director of Rentshield