It’s just as vital to pick the right letting property as it is to pick the right location, property type, and rental rate for your investment property. However, the necessity of a good letting property management agency appears to be frequently overlooked, and many landlords end up unhappy and regretting their negotiations. “This does not have to be the case; all you must do is conduct your research to ensure you select the best letting property management agency you can find and afford,” says Pearl Scheltema, CEO of Fitzanne Estates.
Referrals
“Finding a competent letting property management agency for your rental property through word of mouth is a terrific way to go,” says Scheltema. However, be aware that the person you approach for a referral can be prejudiced in favour of a particular firm or service. As a result, it is a good idea to seek referrals from a variety of sources to find a firm that is suitable for your needs.
Credentials, Certificates, and Professional Memberships
A certified fidelity fund certificate issued by the Estate Agency Affairs Board(EAAB) is required of the Managing Agent. Managing Agents are estate agents, according to the EAAB definitions, and must thus be registered members of the EAAB. They must contribute to the EAAB’s fidelity fund if they maintain a trust account. This fund exists to safeguard the Body Corporate from theft and fraud. The Ombudsman is intended to regulate Managing Agents once the Ombudsman Act is enacted.
It’s also a good idea for the Managing Agent to have its own Fidelity Fund Certificate. This policy protects the letting property management agency from employee theft and fraud, as well as providing further protection for body corporate funds.
Make sure your Managing Agent is a member of the National Association of Managing Agents (NAMA) and hence follows a rigorous code of conduct.
The Debt Collectors Act of 1998, number 114, went into effect in February 2003. The Act stipulates that no person may conduct debt collection business unless he has been duly registered with the Council for Debt Collectors created by the Act. Confirm that your Managing Agent is registered with the Council for Debt Collectors; without this membership, the Managing Agent is not legally allowed to collect arrear levies.
Because Trustees are usually volunteers with other occupations, Managing Agents should be familiar with the Sectional Titles Schemes Management Act and Regulations and should advise them.
Tenant screening process
“Finding quality tenants is one of the most difficult challenges that property investors face. These are the tenants who are courteous, responsible, and always pay their rent on time,” advises Scheltema. “Quality tenants are priceless; they simply help your finances work more smoothly, always maintaining a solid cash flow. Most of the time, good tenant screening results in quality tenants; all you need to know is how to screen your tenants.”
A potential tenant should fill out a full application form and attach a copy of his ID or passport, three to six months’ bank statements, proof of income, and references from prior landlords when applying to rent a house. Furthermore, the letting property management agency will run a credit check with the appropriate credit bureaus, such as TPN (Tenant Profile Network).
Rent collection process
“A professional letting property management agency will detect if rent payments have not been received or if there is an issue with the tenant right away and will begin negotiations to resolve the situation,” says Scheltema. “It is proactive efforts that result in defaulting renters leaving the landlord with minimum or no financial losses.”
In most cases, proactive rent collection eliminates the need for eviction; nevertheless, if an eviction attorney is required, and the agent has retained all correspondence with the tenant, the proceeding will be less confusing, faster, and maybe less expensive.
Fees
Professional letting property management agencies do not demand unreasonable fees and are upfront about their costs. “You should find out how much your prospective letting property management agency charges and what that includes,” advises Scheltema. “Every business will handle its finances differently but knowing what you’re paying for is essential.”
Taking the effort to make sure that all parties are aware of their responsibilities and expectations can help your investment property succeed.
“The key benefit of working with a letting property management agency is that you get access to their systems, methods, and agreements, as well as professional help when needed,” says Scheltema. “Once you’ve found a decent agent, you should be able to relax and let her take care of the rest of the renting procedure.”
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