New tenant screening app helps SA landlords avoid problematic tenants

South African property technology company Preferental has launched a new tenant screening app to help landlords and property managers make informed decisions when selecting tenants.

Preferental is one of South Africa's leading PropTech companies, providing specialised innovation solutions for landlords and property managers.

The new app uses advanced artificial intelligence (AI) and machine learning (ML) to deliver tenant evaluations in seconds faster than the traditional 12 to 24-hour process.

According to the company's Chief Executive Officer Ross Fitzcharles, the law is skewed in favour of tenants and often leaves landlords "grappling with the slow and often costly enforcement of their rights" when dealing with non-paying tenants.

"This leaves landlords grappling with the slow and often costly enforcement of their rights, particularly when dealing with tenants who default on rent but refuse to vacate the property. The situation is further exacerbated by South Africa’s staggering 33.5% unemployment rate, where one in three people struggle to find work. For landlords, this statistic is a ticking time bomb as it significantly increases the risk of encountering tenants who cannot reliably pay rent," Fitzcharles said.

Fitzcharles further highlighted that 18.3% of tenants are in arrears in the country, adding that almost 40% of landlords don't conduct any form of tenant vetting, leaving themselves vulnerable to risks.

“Currently, 18.3% of tenants are in arrears, with those in default owing an average of 77.5% of one month’s rent. This rising financial strain means that landlords face a real and growing risk of rent defaults, which can lead to prolonged vacancies and the costly process of legal eviction.

“In effect, only six in ten landlords engage in tenant screening, a critical process that helps identify reliable tenants who are more likely to meet their financial obligations and treat the property with respect"

With landlords facing these challenges, Fitzcharles says the app will help reduce the administrative burden while reducing risk.

"This tool allows landlords to make faster, informed decisions with confidence, ensuring they select the most reliable tenants,"

The app is said to offer a range of automated services, including:

Credit and Background Checks: Instant verification of a tenant’s credit history, background, and rental record.

Risk-Based Deposit Recommendations: Suggest appropriate deposit amounts based on a tenant’s risk profile.

Fraud Prevention: Real-time employment and bank statement verification reduces the risk of fraudulent applications.

Comprehensive Integration: The app works with major credit bureaus and verification services such as TPN, TransUnion, and Compuscan for accurate results.

Fitzcharles added that all the costs associated with the screening process will come from the tenants.

"Tenants pay a one-time fee of R249 per screening, which includes comprehensive services, such as credit checks, background verifications, and rental history assessments. This fee is collected upfront, ensuring full transparency with no hidden costs" he concluded.

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