To let or not to let

Numerous sellers are being disappointed when 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 often they are wrong and they suffer a 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. 

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 unaware are: 

1. 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 accept it.
2. You cannot ask a tenant to vacate a property other than on very specific and limited grounds. #Failure to pay rent. #The landlord wanting to occupy the property themselves #the landlord would like to do extensive renovations. It is important to note that if the property is sold, the new owner is the one who has the right to give 3 months notice.

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 grounds 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 receiving poor returns and they were the 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. 

It is highly recommended that you use an agent to select a suitable tenant and institute a sound lease agreement.

Editorial by Patrick Kennan