Choosing the right estate agent to manage your investment property is the first and most important step to ensure you get the return you’re expecting. This is according to PayProp CEO Louw Liebenberg. “A landlord’s property is an expensive asset that they ultimately hand over to someone else to manage on their behalf. Entrusting this precious income-generator to an unprofessional supplier can be frustrating, and costly in the long-term,” he says.
As SA’s largest processor of rental transactions, PayProp offers five pointers for what to look for in a good letting agent:
- Only use actual estate agents. While this may sound obvious, remember that all estate agents have to be registered with the Estate Agency Affairs Board (EAAB) and have a valid Fidelity Fund Certificate (FFC). Some agencies are currently struggling to get their FFC from the EAAB, so if you are in doubt, phone the EAAB and enquire about the regulatory status of the agency that you are intending to do business with.
- Reduce the mandate to writing. You may be tempted to just brief the agency over the phone and ask them to “get on with it”, but not having a written mandate is a massive risk for any owner. Ensure that you have a document that outlines what the agency must do and exactly what you must pay in return.
- Understand what systems they use. Financial management is one of the most important parts of letting management – and if your letting agent is using a combination of Post-It notes and spreadsheets to manage your property finances you may be in for a frustrating time. PayProp offers estate agents a state-of-the-art trust account management platform that manages rental funds in a transparent and safe manner.
- Inspections have been done. Ask to see copies of the ingoing inspection report. If this report has not been done, you are not able to claim any damages from the tenant when they leave, as no baseline for the condition of the property exists. Ensure that this report is being done BEFORE the tenant gets access to the property.
- Has a credit check been done? While the tenant has the right to decide that you as a third party may not see his credit check results, you may ask the agency if a check has been done and if their analysis thereof has provided them with comfort that this is indeed a good tenant. Ask upfront what the policy at the agency is and don’t sign a lease with a tenant until you are sure that they have been assessed.
“Property letting is becoming a highly specialised and skilled field and the days of privateers ‘winging’ it are well past,” says Liebenberg. “Ensure that you are using an agency that has the systems and resources in place to manage your property properly.”