If you do not have a good calibre tenant who pays their rent on time or looks after the property, you can quickly be left out of pocket. It also becomes a challenge if you are not able to keep an eye on your investment and make regular inspections.
The latest rental market data shows that the rental market remains strained due to the current economic climate with rental arrears remaining a challenge for landlords. An experienced agent usually knows how to quickly spot a problem and take appropriate action.
New legislation is adding to the challenges faced by landlords. The rental landscape has become more complex and legislated. It is no longer a simple process to evict a tenant and cutting off their electricity or locking them out of the premises will find you on the wrong side of the law.
What does a rental agent do?
All rental agents must comply with EAAB (Estate Agency Affairs Board) regulations in terms of being registered with the EAAB and in possession of a valid Fidelity Fund Certificate (FFC).
There are usually two types of services offered by rental agents. The first is just a basic tenant sourcing service which includes marketing the property and sourcing and vetting a suitable tenant.
The agent will assist with providing advice on the correct rental to charge as well as what the appropriate rent deposit should be.
The agent will also provide a lease agreement which protects the interest of the landlord, collect the rent deposit and first month’s rent and assist with the incoming inspection upon occupation of the premises by the tenant.
The second, would be a full managed option which, in addition to the above, entails the full management of the tenant and property for the duration of the lease agreement. This includes regular inspections of the property, attending to maintenance issues, ensuring the deposit is invested in an interest bearing account, collecting the monthly rent timeously and managing any late or arrear payments and taking the necessary legal action when needed.
A managed solution will usually also include attending to the timeous renewal of the lease as well as outgoing inspections. This option is often preferred as the landlord can ensure that the property is properly looked after and maintained. The agent should also keep the landlord abreast of any legislative changes and ensure that all documentation and contracts are compliant.
How to pick the right rental agent
The most prudent option is to choose someone local in the area where your investment is located. Check that they have a track record and that they are registered and in possession of a valid FFC.
Check that the agent has access to the necessary systems and technology to source and vet tenants and to manage the collection of rentals and the maintenance needs of the property.
Check that they have the necessary systems to ensure there are no slip ups in terms of rent collection and taking the appropriate action in the event of late payments or defaults. Ensure they are able to manage the maintenance needs of the property and have trusted suppliers who can assist when necessary.