How to be prepared for late rental payments

Life is full of unforeseen circumstances which can negatively affect financial means and payment obligations. This is how landlords can prepare for late rental payments from tenants.

Budgets are tight for most South Africans who are battling against high inflation and steep interest rates. For those relying on rental income, it is important to be prepared and know what to do should there be a late payment over this time.

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa explains that a missed or late payment might not always be budget-related. “A late payment can also happen by accident. Sometimes the way public holidays fall affects when the funds reflect in bank accounts, or there could be a bank system problem that also impacts the rent arriving in your account,” he notes.

How to provide cushion against late payments

However, a missed or late payment might have occurred, and to make sure that it doesn’t have a knock-on effect on a landlord’s bond repayments, RE/MAX of Southern Africa suggests the following:

“As emotionally challenging as it can be to address these situations, it is important to remember that your bondholder will penalise you if you default or pay late, so there is no reason why you should not remind tenants of their legal obligations to you. A rental agreement is a legally binding business contract. If you are tolerant and play easy-go-lucky, your tenant might think that there will be no consequences if they pay late again, and this could become financially devastating to you as the bondholder.”

This is where working through a rental agent can be incredibly useful.

“Professional rental agents have access to tools and resources for screening prospective tenants to minimise the chance of defaulting tenants to begin with. They are then also equipped to deal with non-paying tenants on your behalf, which means that the relationship with your tenant does not have to become personal,” he notes.

“Chasing money and dealing with difficult tenants can be extremely stressful. Working with a professional RE/MAX rental agent will make your life so much easier. Don’t let the possibility of a defaulting tenant stop you from making your investment property work for you – enlist the help of your local property practitioner for the best chance of having as stress-free a rental process as possible,” he concludes.

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Writer: Kayla Ferguson 

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