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Property Talk

Property Talk

Author: Andreas Wassenaar
Date: 2017-01-13
It is a new year and a new opportunity to make a positive difference. What you do or do not achieve this year is largely up to you and the decisions you make now. The collective decisions taken by homeowners living in the greater Gauteng and Pretoria region to migrate to Ballito for a better, safer and still productive lifestyle has translated into a flood of migration and directly benefitted all those in the property industry serving their requirements. As most people will typically rent before they decide to buy this has resulted in rental stock shortages and upward pressure on rental rates.

This has also resulted in competition amongst prospective tenants and those with compromised credit ratings will be at a distinct disadvantage. Landlords face two risks when considering a tenant. One, they risk default of rental payments.

Two, they risk damage to their property beyond normal wear and tear. As a prospective tenant looking to secure rental property you will have to think carefully as to exactly how you are going to demonstrate that you provide a very low risk option to any prospective Landlord. If you are unable to do this, then good luck with your search. The first thing you should check is your credit score and rating.

Know your status. Most estate agents would be able to provide this for a fee. If you do have anything that hints at higher risk then you should actively work to have this removed from your credit profile using a company that specializes in this service.

Tenant Profile Network is a widely used credit bureau by many leading realtors and once your rental payment history is recorded and reflected therein this will remain as such for five years - either to your advantage as a tenant, if you have previously paid on time and in full, or to your disadvantage, if your payment history has been sporadic.

Given that for every property there will be multiple prospective tenant's applying, it is important to give yourself every opportunity as a tenant to be considered favorably. There are certain strategies that can be employed by a tenant with a compromised credit rating in order to satisfy a Landlord and secure a property, and an experienced rental agent will be able to advise accordingly.

Affordability is something that all tenants should consider when making a decision on a rental property. The typical extras that will be payable on a monthly basis would be Electricity and Water charges and a flat fee for refuse disposal. If it is a freehold home then a garden and pool service fee could apply.

Having discussed the disadvantage a poor credit profile can present to a tenant, it is interesting to see what the numbers say in terms of how many tenants do in fact have a major delinquency. According to Payprop's report, in KZN the average is 37% which is well below the high of 49% in Limpopo or the Northern Cape, and is similar to the North West (37%) and Gauteng (40%). The Eastern Cape and Free State at 47% of tenants having a major delinquency on their credit record also seem to be higher risk provinces for Landlords.

The lowest at 32% is found in the Western Cape. It is not to say that a tenant with a compromised credit rating cannot provide a Landlord with a good rental experience, but the red flag is something to be noted and managed.

For further information and an interactive analysis of this article follow my blog: andreaswassenaar.blogspot.com.