The Good, the Bad and the Downright Ugly

Private Property South Africa
Lea Jacobs

Tenants come in all shapes and sizes and while much has been written about the importance of finding the right person to rent your property, there isn't that much out there as to how to keep a good tenant happy.

Essentially there are great tenants, good tenants, reasonably good tenants and bad tenants. Only those who have been dragged through the courts attempting to have a tenant who doesn't pay rent evicted truly understand the hardship of entrusting a home to a person who has no regard for the landlord or property. Bad tenants, thanks in part to the laws protecting their rights, can be a nightmare.

Reasonably good tenants on the other hand, may be a little late with the rental payment, may not report faults allowing the home to fall into disrepair, but overall are pretty reliable. Good tenants, always pay on time, keep the garden neat and tidy and generally keep the property in ship-shape condition. Great tenants treat the rental property as their own. The rent is always paid on time, the garden is kept in immaculate condition and the house is maintained to a very high standard.

Unfortunately, great tenants appear to be the exception rather than the rule and any owner who has the fortune to find such a person should treat them like gold.

Most if not all leases have a rental increase clause, but should the rental go up by a specific amount every year or should landlords take certain factors into consideration before putting up the rent by a certain percentage just because the lease says they can?

People in general have had it tough for the last couple of years. Petrol increases have bitten deep and not only affect our pockets with higher transport costs, they have also seriously affected the price of food. Electricity costs have also risen dramatically. Most people will tell you that their electricity bills have doubled over the past few years and even water is much more expensive these days.

While everyone is tightening their belts to some extent, it pays to remember that it is fairly easy for a tenant to downsize his living expenses. Moving into a cheaper property may be a hassle, but it is a relatively easy exercise - replacing a great tenant, however is not.

Landlords need to remember that tenants compare rentals and if they feel that the amount they are paying is unwarranted or that the rental increase is too high, they will move on to greener pastures.

Berry Everitt, MD of the Chas Everitt International Property group says that it is for this reason that landlords need to track their local rental market regularly, compare rentals with what others are asking for similar properties, and be aware of anything and everything else that might affect their tenants’ ability – or willingness – to pay the current rent and any future increases.

He says, “In the past two years, hikes in transport costs and utility charges have made it more difficult for tenants to make ends meet, and more difficult for many landlords to raise their rents without running the risk of losing their tenants. On the other hand, these changes have also made those properties that are close to public transport routes and those that are equipped for ‘green’ living more desirable, which could mean that tenants are willing to pay higher rentals for them.

“Obviously, the income or budget of the tenant will be the primary driver of the decision about where and what to rent. Most tenants have limited funds and at different times in life they will also have different needs to meet with those funds.”

Other factors which can affect demand – and may thus require rental adjustments - are local job creation and new people moving into a town or area, and the amount of new housing development in the area.

Finding and keeping a great tenant means exercising good judgement even when times are tough. Just because a tenant is going through difficult times, it doesn’t mean that all is lost. It does mean however, that the landlord needs to weigh up all the odds and if the tenant is worth keeping – make allowances until the situation improves. Better the devil you know.

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