Reasons for landlords to employ rental agents

Reasons for landlords to employ rental agents

Private Property South Africa
Sarah-Jane Meyer

In the past two years, the economic strain of the Covid-19 pandemic has made property owners question whether they really need to employ a residential rental agent. Do they need an agent to find suitable tenants to; occupy their properties, manage the relationship, stay on top of arrears and ultimately protect their investments?

Johette Smuts, Head of Data Analytics at PayProp, says the answer is a resounding ‘Yes.’

“The South African real estate industry has managed the pandemic-forced transition to remote working with relative ease. In the recent PayProp State of the Rental Industry survey, 92.5% of respondents indicated that they increased the use of technology in their business due to the pandemic,” she says.

“This is a clear indication that agencies believe that those who embrace technology in their everyday activities are in the best position to ride out the storm. Most landlords do not have access to the technology needed to manage their rental properties effectively, but effective rental agents do.”


Smuts says there are four motivators for landlords to employ the services of a professional real estate rental agent.

1. Good tenants are in short supply

Covid-19 continues to wreak havoc on household incomes, which has consequently affected, tenant placements and payments, and Smuts says landlords do need to hang on to good tenants who are already in place.

“In addition to initially helping you identify good tenants, an experienced rental agent will also manage the relationship with the tenants, and advise what reasonable rent increases should be under this climate,” says Smuts.

“Landlords can’t expect 10% or even 5% increases at present. A good rental agent will know what is acceptable in their area and can provide the reality check needed to help manage expectations.”

2. Arrears are on the rise

South African private landlords face increasing financial pressure as the pool of desirable tenants shrinks and the number of tenants in arrears grows. Smuts says that keeping the lines of communication open with tenants is critical to the ongoing stability of this important revenue stream.

“A good rental agent will be able to identify reliable tenants and will be diligent in following up and handling arrears. The process requires an agent who understands payment reminders, letters of demand, and other factors involved.”

3. Regulatory factors

Letting a property, in South Africa can be a complicated process due to the onerous regulations that need to be adhered to. Without the assistance of a qualified rental estate agent, many landlords fall foul of current laws.

The Rental Housing Act regulates the behaviour of landlords, their agents, and tenants and is set, to be succeeded by the Rental Housing Amendment Act in the future. Rental agents have to be familiar with these laws to take care of all aspects of rentals in a lawful manner.

4. Financial scrutiny

Rental agencies that use payment platforms like PayProp are well-suited to financially manage rental properties, says Smuts. “These platforms enable agents to reconcile payments to the right properties as they come in. In addition, landlords, contractors, and the agents are paid without delay from fully balanced trust accounts – in the correct order, with funds ringfenced for the exclusive use they were intended for.”


Smuts says that property is an asset class, and with all asset classes there are certain inherent risks.

“Bad tenants, late payments, a vacant property, or damage to your property – these are all risks that can unduly affect a property owner’s livelihood and return on investment,” says Smuts.

“For most landlords, having tenants in their rental property is better than having it stand vacant, but that is still not ideal for their risk profile. A professional rental agent can help to smooth the process and protect the landlord’s investment.

“However, when it comes to the two income streams of property ownership – capital appreciation and rental income – growth is cyclical. Just because landlords aren’t experiencing the increases they might desire – or be accustomed to - doesn’t necessarily mean that it won’t happen again in the future.

“Rental property owners need to stay the course for the mid to long term because the tide is sure to turn eventually.”

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