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How To Screen Your Tenants

You’ve put in the work and found the right property in the best location as the right investment for you. To ensure the investment works, you’ll want to place the ideal tenants that will value their relationship with you and will show the same commitment to the investment you’ve made. It’s not a walk in the park, but it is always important. It’s about responsibility, reliability, track record, and mutual respect.

Deciding whether you want to go the route of using a letting agent or handling the process yourself is an important consideration to make before you begin the process.

Using a letting agent

A letting agent is helpful as this will provide a focused point of contact that handles the administrative details of the agreement on your behalf. Processes such as vetting, securing, contracts, rental collections, and any other related costs that may arise throughout the term of your agreement with that tenant are conducted by the letting agent.

The one drawback? A cost that is commonly based on a commission of the total monthly rental figure. It’s important to find the right letting agent and is as important as finding the right tenant for your property.

Doing it yourself

For a number of reasons, people prefer not to involve a middleman and choose to manage the tenant process on their own. If the hands-on approach is more in line with how you choose to manage your investment, it’s critical that you take an informed approach from the very beginning to the end.

The following guidelines will help you get the best out of the business model of your property rental.

Finding a tenant

Spread the word. From word of mouth through trusted friends and relatives to classified ads or via social media, be sure to communicate what you’re offering in a clear and coherent way.

Describe the unit

Save yourself the time of having to answer endless, unnecessary questions: How many bedrooms? How many bathrooms? Is it a ground-floor unit or upstairs with a balcony? What about security and parking? Ask yourself all these then list the answers accordingly, including the amount you are charging for the unit on a monthly basis.

Establish a professional relationship

Meet your tenants in person and ask questions. You must get to know them in a way that is relevant to them living your investment. Their hobbies and interests may give you a lot of insight into their lifestyle and will give you a good idea about the potential fit for a good relationship.

Once you’ve shortlisted your potential candidates, supply them with a tenant application form that you can use when screening, vetting, and setting up the agreement with your prospective tenants.

The application

Along with the completed tenant application form, be sure to secure the following:

  • Proof of identity — a certified copy of their Identity Documents
  • Employment details — confirmation of employment and/or most recent payslip
  • Proof of financial stability — three month’s bank statement
  • Background credit check — their agreement to undergo a credit check
  • References — written references from previous landlords
  • Details on all the relevant people who will be living there
  • A signed copy of a written code of conduct that you have shared with them

Once you’ve acquired all the relevant information you need, you’ll make an informed decision. Trust your instincts. Ideally, both parties want the best dynamic from this relationship. Thereafter — and once you have approved the tenant — draft the final agreement including the duration dates of the rental period and make duplicate copies for both parties to sign and keep.

Deposit

Before your tenant moves in, make sure you collect a deposit (usually equivalent to the monthly rent amount) and one month’s rent in advance.

A deposit works as a security fee, necessary to protect your investment, and should be used to cover any damages caused or defaults incurred during the rental term.

The deposit is secured for the duration of the rental agreement and is refunded to the tenant at the end of the agreement, once they’ve vacated the premises at the agreed-upon date and granted there are no damages, discrepancies or disagreements as to the state of the unit or any outstanding payments.

It’s a big decision deciding on who lives in your investment. Getting rid of a bad tenant can be a tricky process, make sure you’re as sure as possible about the people you’ve chosen as tenants — before they move in.

At MMR, we are committed to making your real estate dreams a success and helping you find your new home. Contact us today and get the best advice on investing in property in the best area for you. We look forward to hearing from you.

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+27 (0)21 979 3918

CONTACT AGENT

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SALES CONTACT FOR GLENWOOD

Clorinda Venter

Sales Contact for Thatchfield

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