The ongoing interest rate hikes and overall inflation have resulted in sudden growth in the demand for rentals countrywide. Property owners who are able to keep their properties can now expect a much better return on their investments, provided they can get suitable tenants and manage the process.

"There is a strong trend amongst private owners to handle the rental of their properties themselves," says Mike Bester, CEO of Realty1 International Property Group. "This is understandable, as too many owners have in the past had bad experiences with using rental agents."

But that need not be the case, says Bester. A reputable rental agent or real estate group that does the job properly can save the would-be landlord many hours of frustration and effort, and prevent the problems that go with choosing the wrong tenants.

"It's not just the tenant's financial position that needs to be checked out," says Bester. "You need to verify previous tenancies, the person's history in maintaining a rented property and whether or not he usually pays on time."

All too often, private landlords make use of a standard lease agreement that doesn't make provision for some of the issues that can arise. The landlord may not take the time to conduct the required pre-occupancy check with the tenant, and then he has no recourse when the tenant moves out and claims the damages left behind were there at the outset.

"This can create a particularly difficult situation," says Bester, "especially if a new bill tabled in Parliament is passed that says that a
tenant who stops paying rent cannot be regarded as an illegal occupier and therefore cannot be evicted. In terms of the bill, only land-invaders are now regarded as illegal occupiers, and non-paying tenants must be removed using alternative legislation."

The Amendment Bill to the Prevention of Illegal Eviction From and Unlawful Occupation Of Land (PIE) Act was presented in Parliament in March by Housing Minister Lindiwe Sisulu. It amends the 1998 Act, which a memorandum accompanying the bill says was subjected to "various implementation and interpretation problems".

According to the Literature Review of Small Scale Landlords report on a 2006 research project, there are additional risks faced by private landlords in South Africa. These include the hijacking of the premises by warlords and criminals, dysfunctional body corporates in sectional title complexes that result in the non-payment of essential services and a lack of maintenance that undermines the value of the property, and the frequent mismanagement by council of the collection of payment for utilities, which can lead to debt in the name of the landlord.

Then there is the matter of inspecting the property. The Rental Housing Act stipulates that 'the tenant has a right to privacy' so it becomes difficult for the average person to insist on agreeing a date and time to inspect the property. Not so for the experienced rental agent, however.

"Our contract includes a clause that states we are entitled to inspect the property upon 7 days written notice to the tenant," says the CEO of one of SA's largest companies specializing in rentals. "We enforce these inspections at least twice during each lease period on all rentals we manage, as nipping potential damage in the bud is easier than trying to repair it after the fact."

But it's not an easy process dealing with the tribunals. Complaints have to be submitted in writing and the tribunals take time to investigate them and then try to resolve them amicably before making a finding. Issues are dealt with in terms of the Rental Housing Act No 50 of 1999, and only apply to written and verbal lease agreements entered into after 1 August 2000.

"All these issues make the commission and fees charged by rental agents a drop in the ocean by comparison," says Bester. "With the trend in rentals looking set to continue for the next 18 months, owners should ensure that all loopholes have been covered if they want to enjoy quality tenants and regular returns from their investment properties."