Even the rich battle to pay rent on time

Fin24
2013-10-29 15:15
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Cape Town - It is a sign of the times when only 9% of tenants paying rentals of more than R25 000 per month paid on time.

According to TPN's latest Rental Payment Monitor for the second quarter of 2013 only 57% of tenants paying more than R25 000 per month paid on time.

Only 5% of tenants in the R3 000 to R7 000 rental category are in the Did Not Pay category.

Overall the second quarter of 2013 showed the highest percentage of tenants in good standing since the inception of TPN’s Rental Monitor in 2007.

By comparison though, the continuing decline of consumer credit in good standing points to the need for ever-increasing diligence in identifying quality tenants.

Nationally 71% of tenants paid their rent on time and in full, 4% during the grace period and 11% were in the paid late bracket.

The combined result is 86% of tenants are in good standing and tenants in the "did not pay" category are down to a mere 6%.

TPN data indicates 85% of tenants rent for below R7 000 per month - 23% of these tenants rent for below R3 000 per month and 62% pay between R3 000 and R7 000 per month.

The R3 000 to R7 000 rental bracket consistently remains the best performing.

With nearly a quarter of tenants renting below R3 000 per month, this rental bracket reveals the highest non-payment rate of 9%.

In the first quarter of 2013 rental agents voiced their concern over a growing scarcity of stock, suggesting an oversupply of tenants.

"The challenge on the ground is still a noteworthy shortage of reliable and/or qualified tenants," according to TPN.

"In reality, good quality rental stock still takes time to rent, as a result of the proper due diligence process in placing a suitable tenant."

For the most part it seems agents and landlords are becoming more meticulous about the long-term view.

They are contracting with better qualified tenants and "rejecting the lure of simply signing the first deal with cash in hand".

 - Fin24

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