DIY Landlords all too often end up with serious problems
Reacting to the current lower prices of residential properties, many owners on the Atlantic Seaboard have this year changed their tactics and opted to let rather than to sell, says Lanice Steward, MD of Anne Porter Knight Frank. However, added Steward, some have come a cropper as a result of trying to do their own tenant selection and to manage the property themselves.
Typically, said Steward, the owner decideS that the agents commission for finding and / or managing the tenant is too high. He then opts to go the DIY route. As a first step he places his own rental advertisement (and is surprised at just how much this costs him) and is then further dismayed to find that he gets very few telephone calls.
He places the ad again and again, building up costs that he never anticipated. If and when he finally gets a genuine applicant, he discovers that he has no foolproof way of checking on his credit worthiness or his employment records even though this is absolutely crucial in the selection process.
In all probability he now finds that the lease agreement bought at the local stationer has loopholes and omissions that would have been covered by the agreement provided by an established agent.
All too often, said Steward, in these times of retrenchments and non-payment of bonuses, the landlord finds a few months down the line that he is not being paid his rentals and that his property is deteriorating fast in the hands of his tenant.
The pat on the back which he originally gave himself for saving on the agents commission then becomes a cry of despair as the owner realises he has a non-paying tenant, whom under the present regulations, it will take months to evict.
In many cases, adds Steward, the landlord himself will now be in trouble because he has monthly bond commitments to pay on the property.
We have seen this scenario played out time and time again in recent months among landlords who have declined to use the services of a good agent, she said.
Had the landlord gone the alternative route and appointed an experienced agent, said Steward, the chances of landing in this type of serious predicament would have been greatly reduced.
Experienced professional letting agents, she said, are very aware of the dangers and possible pitfalls and are not taken in by glib smooth talkers.
Professional agents, she said :
A professional agent, said Steward, will always take photographs of all defects in the property prior to occupation and will also list the defects in the initial lease agreement which will be more comprehensive than that of the standard stationers version. These lists and checks, said Steward, are essential when claiming on the tenants one or two month deposit which will have been paid upfront, not to the owner, but into the agents interest accruing trust fund.
Steward warned that unreliable tenants will always target the DIY landlord first while good tenants, for their own protection, gravitate towards the tenants of branded agencies with a reputation at stake.
The bottom line, said Steward, is that the extra cash you pay on agents commission will save you time and money and emotional wear and tear.
Two final tips from Steward :
1) whatever the owner does or does not do, he should ensure that his property is always spick and span.
Good looking properties attract good tenants. Poorly maintained properties attract bad tenants; and
2) he should be especially wary of the high-flyer who apparently has no difficulty in paying a big rent and accepts it without demure. It is this type of tenant, said Steward, who all too often is the first to default.
Article by: www.anneporter.co.za