We recently published an article about landlords taking out insurance to cover themselves in the event of tenants defaulting on their payments.Certain letting agencies provide this service and it covers the landlords rental income for a maximum of three months.It was initiated because of the difficulty landlords have trying to evict unsuitable non-paying tenants or when a tenant decides to leave suddenly leaving the landlord without income.
While this is certainly a good thing to have don’t always assume others have your best interests at heart.Some landlords I know have told me that they paid for the cover but were not informed when the tenant left or when the cover started paying out.
As our readers can imagine this is potentially disastrous to any property investor.The letting agency only informed the owner when the three months of cover was finished and there was no still replacement tenant.The agency had stipulated that the owner would be informed at all times of any developments that might affect them, this is apparently not what they did.
One landlord reported that it had happened to him with two tenants in succession.They had both packed up and left without giving notice and the letting agency only informed the landlord three months later,once again they still had not found a replacement tenant.
Investors use letting agencies for a variety a of reasons,one of which is the distance they live from their investment property.If an investor lives in Nelspruit and has a rental property in Durban it is usually easier to entrust the daily running of the property to a letting agency.It is therefore imperative that one chooses ones letting agency with great care.If yours is the only property they have in a certain area they may find it inconvenient to travel there to check on your investment.Try and find a reputable agency that has a history of servicing your specific area well and maintains contact with you in the ways they have promised.
If you find yourself calling them when they should be calling you make this very clear to them and make sure they understand that they work for you, remember this is your money, your credit record and your livelihood.You cannot afford to take chances simply because of bad communication.
It is of course also the owners responsibility to follow up and ensure that the people they have working for them are doing their jobs.It is an unfortunate fact that while property investors are worried about saving money so are all the other businesses and they may be cutting corners that will affect you.
