Gauteng tenants worst defaulters

Gauteng tenants worst defaulters
2008/06/09

11% of Gauteng tenants did not pay rent at all in the first quarter of 2008, as opposed to only 6% of Western Cape tenants. These shock figures were supplied yesterday by the Tenant Profile Network (TPN), a registered credit bureau and developer of the first rental payment profile database of its kind in South Africa.
"Rising debt among consumers, combined with dramatic increases in fuel and food prices, may affect the way tenants pay their rent in the future," says Michelle Dickens, MD of TPN.
The company released statistics from its database which show that in the first quarter of 2008 only 72% of tenants were paying their rent on time. This is up from the last quarter of 2007 by 3%. In spite of the defaults, Dickens believes the increase in paying tenants is good news for the industry.
Audited figures from all credit bureaus in SA, which have been approved by the National Credit Regulator, show that there are 16.9 Million credit active consumers who average 3 accounts per consumer totalling 50.98 Million accounts. A significant portion of these are tenants who are renting.
Property trends from TPN for the first quarter of 2008 indicate that 28% of tenants are paying late or not at all, this could be a caution to estate agents and property owners.
Dickens says that although consumers are trying to cut their costs by renting instead of buying, the industry still needs to find ways to ensure that tenants pay their rent.
"Credit providers are increasingly critical of whom they take on and estate agents and property owners are now following suit. Property-owners and estate agents need to assess the behaviour profile of their tenants to ensure they will pay their rent at the beginning of the month," says Dickens.
"Although it is not a NCA requirement that estate agents assess the affordability of the prospective tenant - this type of assessment is becoming a best business practice of the industry. It is in the best interests of all parties to assess affordability of the prospective tenant, to ensure he or she is not placed under additional pressure as a result of entering into a lease agreement where the monthly rental is out of proportion to their affordability. Affordability is not measured on earnings alone, but rather the earnings less expenses," she says.
This is not all doom and gloom though, says Dickens, as the more rental agents and landlords that register with a rental payment database such as TPN, the more they can reduce their risk by profiling the tenant before hand.
"Now, agents can spend the first 7 to 10 days of the month focusing on new business and growing the market instead of chasing the 28% of tenants who are bad payers," she says.
TPN has developed the only trusted rental payment profile database of its kind in South Africa and in fact globally that has been profiling tenants for over 8 years. Their database combines information from TPN and other highly valuable sources to provide the most comprehensive behavioural profiles on tenants and prospective buyers in the property industry today.
For more information contact 0861 876 000 or send an email. Click here to visit the website

Gauteng tenants worst defaulters