In the most recent Residential Rental Monitor Report for the 2nd Quarter of 2017, the latest rental trends show that there is a decrease in the number of tenants who pay their rent on time and in full – across all income brackets.
“Part of the reason why tenants are struggling to pay their rent is the increase in utility bills”
Michelle Dickens, Managing Director at TPN
This partly explains some trends that we have noticed in the course of 2017 . . .
- fewer applicants satisfying our tenancy application vetting criteria
- increasing financial commitments showing up in credit reports
- more serious rent arrears delinquency resulting in further action being required
In our opinion, and based on our extensive experience in residential rental management, there are two critical actions that need to be applied rigidly, namely . . .
- Minimise your risk by thorough vetting of all potential rental applications – in the current environment it’s imperative to include a credit check in this process
- Take immediate and appropriate action when a breach occurs in the payment of rent and/or other lease-related costs – the longer you delay, the bigger the problem becomes and the less likely it is to be able to be rectified
Late, part, or non-payment of rent, of course, has a negative knock-on effect on a landlord’s cash flow. We recommend that all landlords should build up a ‘cushion’ of 1 – 2 months rent to cover themselves in the event that their tenants suffer a period of financial hardship.
For professional advice on residential rental management, contact us today.