Why January is a bad time for landlords?

Private Property South Africa
Anne Schauffer

In a recent analysis conducted by TPN Credit Bureau, data shows that rental payment collections in South Africa usually decline by about 12,5% in January each year.

This decline only takes into account the behaviour analytics of tenants who pay late, not even those who partially pay or default on their payment entirely. According to Michelle Dickens, managing director, TPN, it could be argued that the public holiday on 1 January contributes to the average day that rent is paid being stretched to 8 or 9 January when, for the remainder of the year, rent is consistently paid by the 6th or 7th of the month. She says, “If that were the case, we would see a similar trend in months like April or May where there are multiple public holidays. Interestingly enough, there is no such increase over the Easter holidays or any other month with significant public holidays. This phenomenon is unique only to January.”

Dickens continues, “Tenants who display the classic festive season syndrome are not malicious in nature, but are simply caught in a continuation of their holiday payment behaviour before reality sets in and they return to their better selves and better payment behaviour.”

This article originally appeared in Neighbourhood, Sunday Times.

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