The benefits of using a rental agent to place tenants in any buy-to-let investment are numerous, from assisting with the vetting of prospective tenants and monthly rental collections to pre-and post occupation inspections and property management services if they are contracted to manage the maintenance of the rental property.
However, not just any rental agent will do the job well, so how can you make sure that the rental agent you are using is the right one for you and your property? Chris Renecle, MD of Renprop, says that as with any investment decision, the landlord needs to carefully scrutinise the rental agent and property management company they choose to appoint. “The rental agent and property management company are essentially controlling the day-to-day operations of your asset and are therefore responsible for protecting your investment. The appointment of this service provider(s) is therefore not one that should be made lightly.”
So just how do landlords know whether or not they are appointing the right agent or company for the job? Renecle says that as a starting point, landlords should interview a number of rental agents and property management companies before making the final decision as to who to appoint for the job.
As a part of this process, there are three top questions that a rental agent should to be asked:
1. Are you a rental specialist?
“Many estate agencies are offering rentals as a part of their service offering these days as the rental markets in many parts of the country have grown considerably over the past 18 months. The northern suburbs of Johannesburg are a prime example of this. However, a landlord should always ensure that the rental agent they choose to work with is properly qualified to assist them,” says Renecle.
He advises that during the interview process, the landlord asks all prospective rental agents about their experience in the rental market, how many years they have been operating as a rental agent, what qualifications they have and what governing bodies they are members of.
Should property management services be part of the mandate, the same questions relating to the management of assets should be asked.
2. How do you vet potential tenants and handle late or non payment of rent?
Renecle points out that the most critical aspect of letting out property is ensuring a reliable tenant is placed. Therefore, he says that the most important thing to establish is how a rental agent vets potential tenants. “This is the most critical part of the process, because a bad tenant is exceptionally difficult to get rid of, and will end up costing the landlord a lot of time, money and frustration.”
However, Renecle says that even though a tenant has been thoroughly vetted, things can still go wrong and they can fall behind in their monthly payments. “That is why it is also important to establish how the rental agent handles late or non-payment of the rental amount.”
Landlords would also do well to establish the arrears rate of the agency, as this will give them a good indication of how efficient their collections department is.
3. What happens if I need legal assistance relating to the rental property?
It should go without saying that all leases and other legal documents should be prepared by an attorney, and a reputable rental agent will make use of a standard lease agreement that has been drafted by an attorney. However, what happens if a legal notice needs to be served on a tenant or a tenant needs to be evicted for whatever reason?
Renecle says that rental agents are not qualified to handle legal matters relating to the letting of a property, or provide any legal advice in respect of this, but should have a relationship with a well known attorney who they can refer the matter to. “When interviewing potential rental agents, landlords should check which attorneys they are affiliated to and whether or not they are able to offer legal assistance if required.”
Renecle concludes by saying that ultimately, the quality of a rental agent a landlord chooses to work with will impact on their return on investment, so it is important that landlords are critical in their selection process.