Vetting tenants in a slow rental market

The South African rental market is going through a bit of a tough time right now, with both rental growth and tenant payment performance experiencing a multi-year decline.

According to experts, this can make it more difficult than usual to secure reliable, trustworthy, and financially responsible tenants to avoid potential rental defaults and loss of income.

“Properly vetting tenants is always a vital part of any rental property’s success, but it’s even more important when the market is slow and demand is limited,” says Jacqui Savage, national rentals manager for the Rawson Property Group. “It can be tempting to let the vetting process slide in order to fill a vacant property sooner, but this is extremely dangerous for the security of your investment. It’s far, far more difficult and costly to get rid of an unreliable or non-paying tenant than it is to place a reliable one – particularly if you have professional help.”

Savage says all Rawson Property Group Rental Partners follow a very clear and comprehensive process when sourcing quality tenants for their landlords.

“We perform these background checks before taking a prospective tenant to view a property. That way, we know from the start that they can afford the property they’re looking at, are not a security risk during the viewing, and aren’t wasting the landlord’s or current tenant’s time.”

Tenants also stand to benefit from this arrangement by avoiding unnecessary viewings of properties they are unlikely to qualify for.

“It’s definitely a time-saver,” says Savage, “since we can guide tenants towards properties that meet their personal preferences and fit their financial and lifestyle profiles. There’s no point in looking at rentals that aren’t going to allow your toddler or your dogs, for example, so let’s clear up those details from the very beginning and find you the right property.

“First of all, we ask prospective tenants to fill out a declaration of expenses document as well as an application form to kick off the vetting process,” says Savage. “That application form grants consent for us to perform various credit checks that give us a comprehensive overview of the applicant’s finances and reliability profile.”

Compiling that overview includes collecting the following details:

  • A credit and identity check through the credit bureaus.
  • Confirmation of income and employment by means of payslips and calls to employers.
  • Confirmation of monthly expenses by means of three months of verified bank statements.
  • Personal references from previous landlords (if applicable) by phone call.

“It’s only when tenants find a rental that they’re interested in that we pass those application and vetting documents on to the landlord. Once we have the green light from the landlord we draw up the lease documentation and move forward from there.

“For privacy reasons, prospective tenants keep their full credit report if they’re not interested in pursuing any of the rental options that we take them to see,” says Savage.