Rental pre-qualification: here's what to expect
Category General News
Stepping into the rental market? As a first-time tenant, the rental pre-qualification process can feel a bit daunting. But don't worry, you're not alone in this journey. Understanding what to expect can help ease your concerns and set you on the right path. Kellaprince Properties breaks down the essentials of rental pre-qualification, ensuring you're well prepared and confident when it's time to secure your home.
Why rental pre-qualification is on the rise
If you're finding yourself jumping through a few more hoops than expected in your rental journey, take a moment to see things from the other side. Landlords are just trying to protect their investments and this period has been tough on the rental business.
According to the TPN Residential Rental Monitor 2023 Q1, tenants in good standing (regularly pay their rent and do it on time) have declined to 81.86% (from 82.34% in 2022). TPN's Squat Index also reveals that 4 out of 100 tenants classify as squatting; these are tenants that have not made any payment towards their rental for three consecutive months and still occupy the property in the fourth month. In this climate, presenting yourself in the best positive can pave the way for a smoother rental process and a harmonious landlord-tenant relationship.
Benefits of rental pre-qualification for tenants
While rental pre-qualification processes primarily aim to protect landlords, you'll find they offer you several benefits as a tenant. By being pre-qualified, you can save time as you'll only be shown properties that match your profile and budget. Getting pre-qualified gives you an advantage in a competitive rental market and quickens the pace of landing your rental home.
The pre-qualification process can shed light on your spending habits and any red flags for landlords. This can help you improve your application and chances of a successful application. And besides the peace of mind, after you tick the checkboxes, you'll also be in a stronger position to negotiate your lease as a quality tenant.
The rental pre-qualification process
These will be used to ensure you are a legitimate individual who is reliable and capable of meeting your monthly rental obligations. Here are the steps covered:
1. In-person meeting: You and the practitioner will meet in person and establish a relationship. This will be the start of your document submissions and also an opportunity to find out more about the property/properties you're interested in.
2. Rental application form: You'll complete an application form covering your personal details, employment details, and financial information.
3. Identification verification: You will provide a copy of your valid South African ID or passport to confirm your identity.
4. Proof of income: You'll need to provide recent payslips, three months' verified bank statements, or an employment contract as proof of a steady income. For self-employed individuals, you may need to provide recent tax returns or certified financial statements.
5. Affordability assessment: Your monthly income is compared to the proposed rental amount to ensure that you can comfortably afford the rental. At Kellaprince Properties, the common benchmark is that your earnings be at least three times the rental amount.
6. Credit check: The rental practitioner will conduct a credit check to get insight into your financial behaviour, any past defaults, and your overall creditworthiness. The credit check done is a 'soft enquiry' or 'soft pull' that won't affect your credit score. These are undertaken as part of a background evaluation and are not considered a 'hard' check i.e. a check done when applying for credit. Although soft enquiries won't adversely affect your credit score, they are recorded and are visible on your credit report.
7. Background and criminal checks: For a comprehensive background check, the practitioner's client may also request a criminal record check to ensure you won't be a danger to the property and other tenants.
8. References: Your rental practitioner may ask for references, usually from previous landlords, to gauge your past behaviour as a tenant. They can also request character or employer references to confirm your work ethic and responsibility.
9. Rental payments: Once you're pre-qualified, you will pay specific costs to secure your rental. These are typically required as standard at Kellaprince Properties:
- The first month's rental cost
- A damage deposit
- Admin fee
- TPN credit check fee
- Entry inspection fee
As rental scams are on the rise in South Africa, it's important to make sure you've seen the unit and confirmed the agency's credentials before you pay. On the Property Practitioners Regulatory Authority's (PPRA) website, you can check if a real estate agency or practitioner is trading with a valid FFC certificate.
Get through your first pre-qualification
Being well prepared is the key to a smooth pre-qualification process. By having all your ducks in a row, from paperwork to a good credit score, you can not only ease the process but also present yourself as an attractive tenant. If you have any questions about tenant pre-qualification, Kellaprince Properties is just a call, email, or WhatsApp message away. View our properties to let in Mbombela (Nelspruit), White River, and surrounding areas, and get in touch today.
Author: Kellaprince Properties