To let or not to let

A lot of sellers are being disappointed that they cannot achieve a certain price for their house and then  make the decision to let the property hoping for the market to improve.

Sometimes this works but very often they are horribly wrong and they suffer a severe loss, not through a drop in the market but because they have let to a bad tenant who has reduced the value of their asset.

Whist it is possible to have an agreeable letting experience we have known tenants who refuse to pay reasonable rents, do not maintain the garden or the house, allow the pool to go green, refuse to vacate and when the owner decides to sell in exasperation they refuse to allow agents or prospective buyers access.  The house effectively becomes unsaleable except at a give away price.  Evict the tenant I hear you say.  Well its not that easy and many people have found this out to their cost.  The draconian Rent Regulations and the inefficiency of our court system combined put every tenant of residential property in a very powerful position indeed.  Far more powerful than the landlord.

Prospective landlords should tread carefully and make themselves fully aware of the implications of the Rent Regulations before they decide to let.  There are many aspects to these regulations but the two most outstanding of which most people seem to be blissfully unaware are:

 (a)           It is illegal to increase rents on residential property without a Rent Order, whether the increase is reasonable or not, whether the tenant agrees or not, whether it is a new let or not and whether the property has changed owners or not.  The Rent Board has been known to disallow increases even when the tenant agrees.  Imagine how difficult it can be to have an increase enforced when the tenant does not.

 (b)           You cannot ask a tenant to vacate a property other than on very specific and limited grounds. 

Once you have let your property you, the owner, are no longer in control.  It is the tenant who is in control.

Even if you are lucky enough to have a ground to evict a tenant who you no longer wish to occupy your property it might take you months or years to have your rights enforced

The reason that most blocks of flats in Zimbabwe have been sold on an individual flat by flat basis is that the original owners found that the Rent Regulations had destroyed their investment, they were getting no return and they were the proud owners of a diminishing asset.

Consider your options carefully and do not let frivolously.  If you are determined to do so take the trouble to select your tenant carefully, pay less attention to the rental income and more to the likelihood of a careful caring tenant who will look after and maintain your asset and co-operate with you when the time comes that you do need to sell.

Editorial by Patrick Kennan