Keep Tenants Paying on Time

This article is with courtesy of Realestateweb and Bill Rawson (“How to keep your tenants paying and behaving”, 23 October 2008).

Chief executive of the Rawson Property Group, and seasoned investor, Bill Rawson, says that it is of the utmost importance that landlords receive rent from their tenants on time every month. This comes after financial institutions started clamping down on default mortgage bond payments. He added that the days where banks understood a landlord’s predicament regarding tenants not paying rent are over – the National Credit Act made sure of that.

A landlord can find himself blacklisted should he fall behind on bond repayments, and for tenants this means tighter restrictions, like paying a deposit equal to 3 months’ rent as oppose to the earlier one month’s rent. This huge deposit can often only be paid back after a tenant has fully vacated the premises and the landlord has properly assessed damages to the property. This results in tenants not being able to pay the next deposit at their new premises, in turn, resulting in tenants being much less mobile and more likely to renew leases.

Rawson stressed the importance of the selection of tenants. He advised that estate agents and landlords should thoroughly check all references given by potential tenants. It is also wise to use agents with experience in this field.

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