When looking at a possible tenant for your property, "try very hard to find a reason for not accepting him or her".
So says Tony Clarke
, MD of Rawson
Properties, who adds that you should "probe into every aspect of their background, dig to get the facts, accept no statements on their face value".
Many prospective tenants, said Clarke, will arrive at the landlord or agent's offices with credit records that are apparently impeccable, but if one gets hold of their previous landlord it may well become apparent that they have been problem payers.
"Landlords very seldom take legal action against a tenant even if he is a poor payer. As a result some ensure that their commercial credit records are clean while letting rental arrears accrue month after month."
It is essential, he added, to check out not just with their last landlord but with all those from whom they have rented over the last four or five years.
In this checking out process, said Clarke, it is these days acceptable to ask some very personal questions. The applicant must, for example, be asked for written proof of income and bank statements for three or four months. He must also list all his expenses including his credit card debt – and the investigator should bear in mind that some people have two or three card accounts.
"Anyone borrowing close to his maximum level should immediately be recognised as a high risk."
Questions, he said, should also be asked about the applicants court convictions, if any, and whether he has been evicted from any previous accommodation or been summoned for debt.
"The applicant should also have no problem about allowing you to get in touch with his employer and, if he is a churchgoer, with the pastor of his church.
"If the tenant is not prepared to be open with you and to answer all your questions, drop him," said Clarke.
"It is far better to carry two or three months of non-rental returns on your property than to spend months battling with a non-paying tenant who may have to be evicted in the end."
It is sad, but true, added Clarke, that people's circumstances do change and that very often their characters change along with them. The loss of a job, the break up of a marriage or a partnership or the sudden incursion of death can all lead to people deciding to make the landlord their last payment and then only if and when they are again in funds.
He says a non-paying tenant can wreck your buy-to-rent investment's returns and lead to a litany of other woes.
"A bad tenant can not only destroy your income flow, he may well get you blacklisted with the Credit Bureau or with your bank because banks are now totally inflexible about bond repayments being right on time."
"In this regard, he added, it is a wise idea to get your bank to agree to let you pay on the 8th or 9th of the month rather than at the month end. This will give you time to chase up your tenant at the end of the previous month."
"However, the effort of securing a really good tenant very definitely makes this difficult work worthwhile."
For more information contact Tony Clarke on 021 658 7100 or send an email.Readers' Comments
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This article is rather one-sided. There are many reason why some people have been blacklisted. It is not always that they did not want to pay their debt but that they could not. Contact was with the creditors but where all lumped into one boat – could not pay. Don't speak of the debt councilors that is another money-making racket!!!
Due to the bad economy businesses have failed. Illness in the family depleted savings, there are many valid reasons. Are these poor people to become homeless because they do not have a clean credit record but may be trying to rebuild their lives? It is not just a black and white scenario. They need a home to live in and they are more than willing to pay their rent. I know I have been there! - Nameless
I agree. This is a typical one sided view of the issue. Although I can understand where the comments are coming from.
Having been an Owner and Landlord in the past and now a Tenant, due to the fact that "Life Happens".
You often feel like scum and a criminal because of the way that some Landlords
treat you when applying to become a Tenant. The fact that I (for example) don't have any debt, a fixed income, but was sequestrated due to an ex-partner who needed my money more than I apparently needed it, all of a sudden makes me a worthless scum in the eyes of the idle rich. Think again Mr/s Landlord and Mr/s Agent - I don't wish this scenario upon anyone - not even my ex-partner. My current scenario probably makes me a better credit risk than about 80% of the population, despite my ITC. - Anonymous
Thanks for a rather informative article.
It is always good to see the situation from both sides: the tenant and landlord.
However, from a landlord point of view, this is always a major hurdle to find the right kind of tenant.
The landlord has much more to lose than a tenant, who can pick up their belongings and leave within a night and go anywhere they please. Many Tenants prefer to live like that. NOT ALL but MANY! The landlord has the home/building and the costs involved in keeping it maintained, and the bond to pay. He CANNOT run away from his debtors.
However, I would like to say that choosing the persons carefully, not only just being able to pay the rent but also to fit with the other people, can make a huge difference so that the stay is pleasant for the new tenants, old tenants, and the landlord. More work, but in the long run it does pays off.
After one family left and I commented on what a beautiful state the place was left, every corner was scrubbed and cleaned, even the toilet and the stove was sparkling, the tenant's reply was "but that is how I was reared and taught, leave the place cleaner than you get it".
So do the homework well, no matter how difficult it may be, it will be to the benefit of all. But most of all it is treating others with dignity. - Val Looking for a new home?
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