There are also risks associated with bringing strangers into your home, especially if there is no one there to supervise them.
While property certainly lends itself to the opportunity to earn extra income, there are nuances and legalities, risks and potential costs, warns Samuel Seeff, chairperson of the Seeff Property Group.
There are also risks associated with bringing strangers into your home, especially if there is no one there to supervise them, he says. Long-term tenants must be vetted to ensure authenticity, says Derek Lategan, managing director of Excellerate Security Services.
For short-term tenants, terms and conditions must be signed and all contact details and personal information verified. “Strict measures should be put in place for visitation and guests of the tenants, which would need to be signed and agreed upon by both parties.”
The most important place to start is your insurance provider, says Charnel Hattingh, national marketing and communications manager at Fidelity ADT.
“The rules change if you plan to use any of your property or buildings to generate an income, and your insurance company will tell you what requirements they have in terms of security systems and procedures.”
Hattingh says technology now offers homeowners a wide range of products. The latest technology should be combined with common sense – for example, make sure you have all contact and identification details of anyone renting your property, and/or ask for details of anything they may store in your storage facility.
Lategan says: “Set rigid terms and conditions which outline the items that can be stored and any adaptations to the space that would need to be made based on the items being stored there. A full declaration of what is being stored must be gathered.”
Landlords should keep all personal belongings locked safely away, Hattingh advises. “Don’t leave keys and alarm codes lying around. Talk to your security company so they know about guests or movement they might come across on your premises.”
Seeff says it is important to understand what you can and cannot do when renting out property. This includes aspects such as zoning.
Homeowners should ensure their properties are suitable for the type of rental income they have in mind. For example, not all areas are suitable for holiday rentals.
Make rules clear straight away
Having another adult in the home to contribute to household expenses can make the burden of paying off a home loan “a little lighter to carry”, says Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa.
Trouble arises when sharing a property with another autonomous individual who is paying rent and expects to have a say in how things run.
“The dynamic will be different depending on whether it is your own child or a tenant, but the principle remains. Whoever has their name on the title deed will always hold majority control.”
Goslett suggests distinctions are drawn up at the start regarding which rooms are common shared spaces and which are personal spaces, and rules must be set out regarding all spaces.
Meet before you sign the lease
Typical checks such as affordability references and employment are “insufficient” when deciding who to share a home with, says HouseME’s Ben Shaw.
“If you are going to be living with or alongside the person, we suggest personal engagement to determine their compatibility with your lifestyle and the people who are already living there.” In addition to criminal checks, meeting someone in a public space can help you get to know the person.
“We’ve also seen some owners ask for motivational letters for further insight into the applicant.”
Inquiring about their social expectations also helps: “For example, how many entertainment events do they expect to host each month.”
Shaw suggests landlords take out insurance for both rental and property damage. “One nuance of this sort of rental arrangement is that owners struggle to be confrontational as they live near or with the tenants, and timely rental collection can become awkward.”
Using a third party agent is beneficial.