12% of SA Failing to Pay Rent

Landlords Struggle to Collect Rent

The information in this article is courtesy of Realestateweb ( SA’s worst and best tenants – 16 February 2009)

According to the Tenant Profile Network (TPN), the fourth quarter of 2008 saw 54% of tenants pay their monthly rental on time. The third quarter showed a similar figure.

Michelle Dickens, managing director of TNP, says the national average is 12% of tenants who cannot meet the their rental commitments at all. Also, 60% of leases obtain only 0,5 to 0,75% rent value as a percentage of the market value. This is bad news for investors who are left with a shortfall on their mortgages and levy payments.

Of the entire county, Kwa-Zulu Natal had the worst performance, with 18% of tenants failing to pay rent. Both the Eastern Cape and Gauteng recorded 10% each while the Western Cape had only 8%.

It seems like tenants paying R3000-R7000 income bracket are more likely to meet their commitments with an average of 61% making regular or full payments. Problems with rent not paid on time usually persist in the rental price bracket of R5000-R8000.

· TPN is a credit bureau which provides credit screening and reports for the rental property market.

Rent property in South Africa