Landlords need professional rental agency in trying times
MAIN IMAGE: Johette Smuts of PayProp
For many landlords, the idea of managing their own rental property or portfolio of properties seems relatively straight-forward. In many cases, particularly with single properties, an owner might manage just fine, provided the tenant pays on time and looks after the property.
But things don’t always go as planned. The past two years have shown this in the extreme and having a property manager armed with the right tools to manage the lease and property in trying conditions has been a lifesaver for many buy-to-let investors.
Johette Smuts from residential rental payment platform PayProp says since March 2020, landlords have battled with keeping and sourcing good tenants, dealing with mounting rental arrears fairly, and in the unfortunate cases of non-payment, landlords have been unable to evict these tenants.
“Whilst many challenges have abated somewhat with the lessening impact of the pandemic, the reality is that the intricacies of rental portfolio management are best navigated with the expertise of accredited rental agents,” says Smuts.
Jacques Erasmus of Letting People said the rental agent is the ultimate go-between for the tenant and the landlord. They ensure that both parties are fulfilling their part of the deal and that each party is happy.
“The most important first step to choosing a rental agent is to find one that is professional, experienced, and qualified. Some estate agents may offer a few of these services, but qualified rental agents have resources and experience that aren’t available to others. They can conduct full credit checks, which reveal whether a potential tenant is in debt, under judgement, etc. This translates to massive peace of mind for landlords, who can be assured that the tenant they choose is not hiding debt or a bad credit record.”
Smuts explains what to look for in a professional property practitioner:
Whilst tenant arrears are improving, 45% of respondents that took part in the annual PayProp State of the Rental Industry Survey for 2021 reported arrears were worse last year than before the pandemic. This percentage improved from 77% the year before, but arrears are still a concern.
Smuts says that forward-thinking rental agents have powerful tools and tested processes to identify bad tenant behaviour, such as late and non-payment, before it becomes a major issue. “The best platforms can remind tenants to pay ahead of the agreed date or when a payment is missed and can issue further reminders or even letters of demand when necessary.”
However, says Smuts, in the current climate it is far more constructive to work closely with tenants to assess affordability and agree on payment plans. “These are all processes, negotiations and conversations that a professional rental agent is skilled at undertaking,” says Smuts.
Technology for professional property management
Good agents can navigate the property rental lifecycle, including and most importantly, keeping an accurate and transparent window on payments and transactions relating to the property. Doing this for one property can be challenging enough, but with several properties in your portfolio it tends to be overwhelming. Technology solutions are available to rental agents that can automate this journey to offer professional and reliable assistance.
Weather the worst storms
Despite ongoing post-pandemic challenges in the rental market real estate business owners are almost twice as likely to have considered buying another agency than selling their own in 2021. Smuts says this statistic is further evidence of the resilience of the industry.
“Good agents have faith in the industry even in the most challenging of circumstances and instead of cutting their losses, are considering the exact opposite and investigating further investment.”
Good agents invest in keeping property owners’ investments safe and sound through professional management of rental contract relationships.
PPA-compliant, impeccable ethics
The new Property Practitioners Act is in effect through the publication of associated regulations, governing the activities of all property practitioners in South Africa. Amongst these regulations are stringent rules about the signing of mandates, disclosure with regards to properties, introduction of and dealings with lessees, and the management of funds pertaining to property rentals and sales. Good agents abide by the Act ensuring that all property transactions are open and honest. As a landlord and property owner, dealing with such an agent offers the peace of mind that all transactions are compliant with legislation and ethically sound.
Update and hone skills
Under the new Act, agents are required to undertake professional development activities every three years to update their knowledge and improve their professional service. Every property practitioner must complete at least 12 modules of continuing professional development with a minimum of four modules completed each year.
“In trying conditions great agents balance technology, sound financial management, impeccable ethics and legal compliance with resilience, local market knowledge and empathy to serve all parties well,” concludes Smuts.