When a tenant fails to pay rent on time, landlords can face significant financial challenges. To minimise their risk, landlords can put proactive measures in place to ensure a more stable and predictable rental income.
READ: A step-by-step guide for first-time renters
According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, proactive management, clear communication, and fostering good tenant relationships are key to minimizing financial risks and maintaining a successful rental property business. “This is why it is so crucial to involve a reliable rental agent who can help you manage your tenant relationships well,” he notes.
To help landlords avoid some of the pain points of collecting rent on time every month, RE/MAX of Southern Africa shares some best practices to implement across your rental portfolio:
Regular and prompt communications
Send the monthly rental invoice a week or two before the payment is due. A property management software can be used to send automated rent reminders via email or SMS a few days before the due date. If a payment is missed, contact the tenant immediately to understand the reason and discuss a possible work around.
Early payment discounts
Incentivise tenants to pay rent early through discounts or rewards. For the tenants with consistent early payment records, the rewards could be anything from a gift card to the promise of no rental escalation for the following year.
Build in some cushion
For some peace of mind and stability, build up a reserve fund to cover potential rental arrears. Allocate a percentage of the rental income to this fund regularly to ensure it grows over time. If you need the rental income to cover the home loan repayments, then make sure you build in enough time between when the rent is due versus when your home loan repayment is due.
As a final step, Goslett suggests that landlords fully understand how to take legal action if necessary. “The eviction process can be lengthy, so it is important to follow the correct legal procedures strictly from the very beginning to avoid complications and potential liabilities that could drag out the process any further,” he says.
READ: Landlords: A guide to finding the ideal rental candidates
Additional information:
The Rental Housing Tribunal has the authority to deal with disputes, complaints or problems between tenants and landlords in the rental housing dwellings:
Any practice unreasonably prejudicing the rights or interests of a tenant or a landowner - It may, amongst other things relate to:
- Illegal lockouts or illegal disconnection of services (water, electricity etc.)
- Failure to refund a deposit
- Damage to property
- Demolitions and conversions
- Illegal evictions (The Tribunal does not have jurisdiction to hear applications for
- eviction orders)
- Forced entry
- Non-compliance with house rules
- Harassment and intimidation
- Failure to issue receipts
- Unlawful seizure of tenants’ goods
- Prohibiting the establishment of tenants’ committee and tenants’ activities
- Termination of Municipal services
- Causing a nuisance
- Overcrowding and causing health hazards
- Exploitative rentals and determination of fair rentals
- Lack of maintenance and repairs
- Non-payment of rent
- Discrimination by landlord against prospective tenants
In terms of section 13(13) of the Rental Housing Act 50 of 1999, a ruling of the Tribunal is deemed to be an order of a Magistrate's Court in terms of the Magistrate's Court Act, 1994.
Additional information: Just Property shares five tips that will help you rate as a top tenant (read the article here)
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