As any property management expert can attest, managing a property is not without its fair share of challenges. This is one of the biggest misconceptions about the property investment industry, and one that many homeowner renting out their property will eventually realise – often only after they have tried to manage the property themselves. While the management of property may seem like a straightforward, easy tasks, in reality it is a demanding, full-time job in itself to effectively manage a property – even if it’s a small apartment or commercial space that has few tenants and minimal upkeep required. Some of the biggest challenges for managing a property in South Africa or abroad include the following common problems:
- Tenants not paying on time
One of the biggest problems facing landlords is tenants who do not pay their rent on time. Rent collection is by far one of the most tedious and stressful aspects of property management, and with repeat offenders always paying their rent late, it can cause huge problems if property owners are relying on rent income to help towards their bond repayments or other costs. Screening of tenants before any lease is signed will go a long way in preventing issues such as this, but many landlords do not find the time or capacity to do this properly. A good management company has both the manpower and know-how to do proper screening and even credit checks and criminal background checks, ensuring better quality tenants and fewer issues with payment all round.
- Lack of property upkeep
Another common tenant issue is lack of property upkeep. Maintenance of your property in South Africa is something that has to be done at various points; however when tenants do not take caution in keeping the property well-maintained, routine upkeep becomes constant fixing and maintenance, often at the expense of the property owner. Damage to property can result in tenant fines or even eviction, but many tenants continue to show disregard to the property, which results in warning letters, constant calling out of caretakers and other related stresses.
- Complaints against tenants
Noisy tenants, late night parties, drunk and disorderly conduct, disputes with neighbours, noisy pets, illegal braais on the balcony and other complaints against tenants is something no property owner wants to face. Knowing how to deal with complaints and how to deal with unruly tenants too is something that property management experts are able to do effectively and efficiently, taking out the stress of homeowners having to deal with disputes on their own without the experience and know-how to manage these issues properly.
- Evicting problematic tenants
When tenants have reached their maximum warnings and are consistently defaulting on rent, or causing problems for other tenants, it is time to evict. This can be a daunting experience for many property owners, especially if they do not have systems in place and lawyers on hand to assist with the legal ramifications of eviction.
- Renovation of occupied properties
Older properties often need to undergo renovation to increase the value of the property, and to upgrade the property in general. This could be something simple such as replacing kitchen counters and cupboards with new and improved fittings or a more involved renovation involving days of labour and construction. Renovating property while there is tenants in the building can be tricky, which is why property managers are ideal when it comes to property renovation – being able to facilitate the process effectively.
In the world of property management, many myths and misconceptions abound. Many individuals and property owners do not fully understand what the term means, and have many assumptions about the effectiveness and necessity of such a service. Some of the most common misconceptions regarding real estate management include the following:
- Only the very rich need to consider the need to have their property managed.
This is one of the biggest myths, leading many homeowners within the mid-level real estate to assume that their property does not require management. In reality, any property that you are renting out to tenants requires management – from day to day property maintenance work to tenant management, lease agreements, rent collection and property renovation, each of these things is managed by an outsourced, experienced company rather than having to try and do it all yourself as a landlord.
- Anyone can manage a property, and you don’t need to outsource to get the job done.
Another common myth, many property owners think that they are able to handle everything themselves, only to end up with huge stress and problems when they realise just how much work goes into the management of a property. Tenant management alone can be a demanding job, and without the right experience and skills, it can be extremely difficult to take on something like this on your own – especially if you have a full-time job in addition to managing your own property.
- Managing a property is simply a case of managing tenants.
While this is indeed a big part of the management process, tenant management is only one aspect – things like problem call outs to deal with broken geysers, blocked sinks, leaking toilets and other small issues are also covered, as are maintenance tasks, renovations, leases and every other aspect that goes into the running of a property in South Africa that is being rented out.
- Only local properties can be managed, not overseas properties.
One of the biggest trends in recent years is the investment of overseas property. Many South Africans and other nationalities are looking abroad for properties that they can use as holiday homes for some part of the year, and rent out for the rest of the year. Some homeowners have the misguided assumption that they will be able to handle the rental process from another country – one of the most potentially risky mistakes they could ever make. An overseas property manager is essential to ensure that your property is managed properly, regardless of where it is in the world.
- Property managers are not worth the costs involved.
By far one of the biggest myths is that the management of property will probably be too expensive, and not worth the costs involved. Even small properties can benefit hugely from management services, and studies have shown that well-managed properties are actually more likely to increase in value on a quicker scale than properties that are not managed or ones that are managed poorly. As things like regular upkeep, renovation and other maintenance is done on a routine basis, the property stays in good condition as tenants come and go, making property management a hugely worthwhile investment on many fronts.
As any landlord knows, property management is seldom as it seems at a glance. Many homeowners who plan to let out their property assume that managing tenants and the property itself will be simple and straightforward, without understanding the huge amount of admin and effort that goes into the management of a property – especially in the case of an apartment block. For new landlords hoping to learn how to effectively manage their property in South Africa, here are a few things to consider when letting out your property to prospective tenants:
- Finding the right tenant
This is the first and often the trickiest step when managing a property. A company that has experience in dealing with tenants is able to determine what sort of tenant to avoid and which tenants will be the least problematic, while an inexperienced landlord may not know how to approach this without added stress. Things like background checks, references, suitability and other factors all play a huge role in property management, to ensure that you find only the best tenants, who do not have a history of rent payment delays, property damage or other factors.
- Day to day tenant management
Another huge aspect of the landlord job is dealing with tenants on a regular basis. Landlords may be expected to speak to tenants about rent owing, rent increases, problems in the block, noise complaints, any items that need repair and many other issues that may arise on a daily basis. Having to always be on call can be demanding and extremely stressful to many landlords, especially those who have full-time jobs in addition to managing their property. This is where property companies come in – they are able to deal with the petty issues that arise, leaving landlords free to focus on the bigger issues without having to worry about being bothered throughout the week with small complaints.
- Property Maintenance and upkeep
Yet another aspect of managing a property in South Africa is the property maintenance and repairs that always arise. Landlords often under-estimate the level of work and patience that this requires, from dealing with the tenant and addressing their queries, all the way through to finding a repairman to fix the problem at stake, and getting the best quote too. Then the landlord needs to liaise with the tenant to ensure that they will be at the premises when the repairman is due – resulting in a huge amount of time and admin.
- Renovations and property improvements
Aside from repairs and ongoing maintenance of your property, you may also want to consider property renovation as a way to increase the value of your property. For most landlords operating independently, this means obtaining permission from your tenant, and working around their schedule as well as your own schedule to determine what renovations are required, and how to go about getting them done. Without experience in this, it can lead to many sleepless nights – making a property manager a hugely important investment.
- Rent payments and other issues
How do you go about ensuring that rent is paid on time each month? This is another huge factor when it comes to managing a property, and with many tenants lapsing on payments, it can become a huge chore to keep track of who has paid their rent. This is one of the biggest values of a property management company – they are able to keep track of rent and all other aspects, ensuring that landlords can focus on the profits rather than the day to day stress.