How to hang on to good tenants
Category RealNEWS
With interest rates continuing to rise alongside inflation and the cost of living, it is getting harder for all households to make ends meet - and for landlords to hang on to quality tenants, even when they don't increase rents.
"The past few years have not been kind to landlords," says Gerhard Kotzé, MD of the RealNet national estate agency group. "Many had to accept rent defaults during the Covid lockdowns due to a moratorium on evictions and wait for months afterwards for tenants to catch up. And then, just as the market showed real signs of recovery, inflation began to climb steeply, prompting the Reserve Bank to raise interest rates - and the cost of all types of debt.
"The result is that many tenants now find themselves not only having to pay more for food and transport and other necessities, but higher instalments on their cars, loans and credit or store cards. They are often not in a position to accept rent increases, and many may in fact have to move to more affordable accommodation before the current rate hiking cycle in over."
Consequently, he says, landlords should seriously be taking proactive steps to retain quality tenants and keep their investment properties occupied.
"For example, they could actually consider a reduction in rent for a certain period for tenants who have proved their reliability as good payers and who take good care of their properties. Or they could perhaps offer a month rent-free on condition that the tenants renew an annual lease.
"This might seem like giving away good money, but it will be a sound strategy if it means the home remains occupied, because it usually takes at least two months to re-let a property and start earning rental income after an existing tenant has left."
Kotzé also says that hands-on landlords who ensure that repairs and maintenance tasks are carried out promptly are also generally more successful at keeping tenants, as are those who address their tenant's concerns about security, parking or noise in a sectional title scheme by being an active member of the body corporate.
"On the other hand, tenants tend to react really badly to being 'ambushed'. If a rental increase is really necessary, it should be handled sensitively and the tenant given as much advance notice as possible.
"Given time to think about it, most tenants would rather find a way to pay a fair increase than move home, especially if they have a good relationship with the landlord. And if they really can't afford the increase and have to give notice, the landlord will at least have more time to find a replacement tenant."
Author: RealNet
