Extra risk in letting equipped property

WHEN considering whether or not to furnish rental properties, the risk associated with damage must be taken into account. Even in high-end apartments, damage can occur, says Nicholas Stopforth, managing director of the Amdec Property Group.

“This is somewhat of a generalisation, but there is usually more risk associated with furnished rental properties. Things do get damaged, over and above daily wear and tear, but just as one budgets for rates and taxes, you should put money aside for repairs.”

In addition, he says landlords must ensure contracts are watertight in terms of liability; however, a strongly worded contract enforcing it is time-consuming, costly and often unfeasible.

Landlords can also use professional managing agents to conduct frequent inspections and if any damage is noted, they can deal with it, says Amdec’s Tersia Taljaard.

Tenants have to pay higher deposits for furnished rental accommodation – sometimes as much as three times one month’s rent.

“This gives a landlord security.” However, landlords usually furnish apartments with durable furniture to withstand multiple tenants, says Lew Geffen Sotheby’s International Realty’s Lisa Hendricks.

“There will always be wear-andtear concern for landlords, but that is why we make full photograph inspections on hand-overs. We provide the landlord with a furniture lease addendum which documents furniture and its condition.”

She says the tenant will be responsible for unreported damage, beyond normal wear and tear, and for the cost of replacing any missing furniture at the move-out inspection.