6 signs your tenant will be troublesome
According to the latest market research compiled by TPN, a registered credit bureau and developer of the industry's first rental payment profile of its kind in South Africa, on average 10% of tenants default on 2 months' rent, says TPN MD Michelle Dickens.

As no landlord/ owner wants to be stuck with defaulting tenants and rising costs there are some telltale signs to watch out for before placing a tenant on the property.

The dead giveaways of bad tenants are:

  1. If the tenants are a couple or siblings and they request that the landlord only signs the lease in one of the applicants name consequently only that credit check is made;
  2. Tenants who pay 6 months upfront, usually default in month 7;
  3. The tenant requires the property immediately, usually on a Saturday afternoon after banks are closed and wants to pay by cheque
  4. The tenant signs a lease and says they will pay your rent in cash on the 1st, the landlord meets the tenant at the property to hand over keys and does an incoming inspection. The tenant has a "story" and promises to pay via EFT the next day. The landlord hands over the keys in trust and does not receive rent;
  5. Initially the tenant starts paying late and the tenant claims they have had a family emergency and no payment is forthcoming;
  6. The tenant does not answer or return calls.

However, there are some methods landlords can use to get themselves out of sticky situations without breaking any laws or incurring heavy fees from going the litigation route.

Do not hand over the keys to the property until:

  • You have credit-checked each adult occupant;
  • Signed a lease agreement in all the adult occupants' name;
  • The deposit and first month's rent has cleared in your bank account;
  • Had sight of the original ID/Passport document and made copies;
  • Received copies of each applicants' payslip and 3 months bank statements;
  • If the tenant does come and let you know they are in financial trouble, assist them in cancelling the lease and finding a new tenant

Keep the property well maintained. The chance of finding and keeping quality tenants are better and the tenant is unlikely to blackmail you by stating rent was not paid because of a maintenance issue.

Always send your tenant their rent statement each month, then tenant cannot state rent was not paid because they did not know how much to pay.

Best practice for landlords is to realise that there is a direct correlation between a tenant receiving a monthly invoice/statement and payment on time. Landlords should provide the tenant with a monthly rental statement on the 25th of each month to improve the prospect rent collection.

Also factor in that the tenant might default, so it's advisable to include these figures into your own calculations when determining cash flow or shortfall for new investment properties.

* TPN specialises in tenant behaviour and rental performance.

Article by: www.tpn.co.za