The Real Cost of Bad Tenants: Why 60% of SA Landlords Don't Screen (and Pay the Price)

Every landlord knows someone with a horror story. The tenant who stopped paying after three months. The one who disappeared overnight, leaving R30,000 in damages. The one who fought eviction for eight months while the bond payments kept coming out of the landlord’s pocket.

These aren’t rare events. In South Africa, they’re disturbingly common — and almost entirely preventable.

The Numbers Don’t Lie

The TPN Rental Monitor tracks tenant payment behaviour across South Africa. The data paints a clear picture:

12% to 18% of tenants are in arrears at any given time
The average time to legally evict a non-paying tenant is 3 to 6 months
Only 40% of private landlords conduct any form of screening before signing a lease

That last statistic is the key. The majority of landlords hand over the keys to someone they’ve barely verified — then hope for the best.

What a Single Bad Tenant Actually Costs

Let’s walk through a realistic scenario. You rent out a two-bedroom flat in Cape Town for R12,000/month. Your tenant stops paying after month four.

Lost Rental Income

The legal eviction process in South Africa requires notice, mediation attempts, a court application, and execution by the sheriff. Even in the best case, this takes three months. More commonly, it takes five to six.

Lost rent: R60,000 – R72,000 (5-6 months at R12,000)

Legal Fees

You’ll need an attorney to handle the eviction application. Costs vary, but typical fees include:

Attorney consultation and letter of demand: R2,000 – R5,000
Court application preparation: R8,000 – R15,000
Court appearance (if contested): R5,000 – R10,000
Sheriff’s costs for execution: R2,000 – R4,000

Legal fees: R15,000 – R30,000

Property Damage

Non-paying tenants who know they’re being evicted rarely treat the property with care. Common damage includes:

Holes in walls, broken doors and fittings
Removed light fittings, geysers, or appliances
Neglected plumbing leading to water damage
Garden and exterior deterioration

Even moderate damage typically costs R10,000 – R25,000 to repair. The deposit — if you collected one — rarely covers it all, especially after interest payments are accounted for.

Damage repairs: R10,000 – R25,000 (net of deposit)

Re-letting Costs

Once the property is repaired, you need a new tenant. Factor in:

Advertising: R500 – R2,000
Cleaning and staging: R2,000 – R5,000
Vacancy period while finding a new tenant: 2-4 weeks (another R6,000 – R12,000 in lost rent)

Re-letting costs: R8,500 – R19,000

The Total

Adding it all up for a single bad tenancy:

Lost rent: R60,000 – R72,000
Legal fees: R15,000 – R30,000
Damage: R10,000 – R25,000
Re-letting: R8,500 – R19,000

Total cost: R93,500 – R146,000

For context, that’s roughly 8 to 12 months of rental income wiped out by one bad decision.

The Hidden Costs Nobody Talks About

The financial damage is only part of the story. Bad tenancies extract costs that don’t appear on any invoice.

Emotional Toll

Dealing with a non-paying tenant is stressful. The late-night messages, the broken promises (“I’ll pay next week”), the legal uncertainty. Landlords frequently report anxiety, sleep disruption, and relationship strain during protracted eviction processes.

Opportunity Cost

Every hour you spend chasing arrears, meeting attorneys, and supervising repairs is an hour not spent on your career, your family, or finding better investment opportunities. For landlords who manage properties alongside a full-time job, the time cost is enormous.

Bond and Cash Flow Pressure

If you’re servicing a bond on the property, the bank doesn’t care that your tenant isn’t paying. Miss enough bond payments and you risk your own credit record — or worse, the bank calling in the loan.

Insurance Complications

Standard homeowner’s insurance doesn’t cover tenant-inflicted damage or loss of rental income (unless you have specific rental insurance). Many landlords discover this too late.

Why Don’t Landlords Screen?

If the cost of a bad tenant is so high, why do 60% of landlords skip screening? The reasons are surprisingly human:

“It costs too much”

Individual credit checks cost R50-R150 per bureau. A full multi-bureau screening bundle runs R200-R400 per applicant. If you’re screening three candidates for one vacancy, that’s R600-R1,200 out of pocket — with no guarantee you’ll find someone suitable.

The reality: Screening costs less than 1% of what a bad tenant costs. It’s not an expense — it’s insurance.

”I can judge character”

Many landlords trust their instincts from a viewing or interview. The applicant was well-dressed, polite, and had a firm handshake.

The reality: Professional tenants — people who deliberately exploit landlords — are experts at making good first impressions. Charm doesn’t pay rent. Data does.

”They were referred by someone I know”

Personal referrals feel safe. If your colleague’s cousin needs a place, surely that’s low risk?

The reality: Referrals are a great starting point, but they’re not a substitute for objective verification. The person who’s wonderful socially might have R100,000 in debt and two previous evictions.

”I just need someone quickly”

Vacancy costs money. When a property sits empty, the pressure to fill it fast can override caution.

The reality: A vacant property costs you one month’s rent. A bad tenant costs you eight to twelve months. Taking two extra weeks to screen properly is the cheapest insurance you’ll ever buy.

”The process is too complicated”

Registering with credit bureaux, obtaining POPIA consent, interpreting reports — it can feel overwhelming, especially for a landlord with one or two properties.

The reality: This used to be true. Today, platforms like Indlu bundle the entire process into a single dashboard — application, screening, and compliance — for less than what a single manual check costs.

The ROI of Screening

Let’s make the maths explicit:

Without screening:

Probability of a problem tenant (based on SA arrears data): ~15%
Expected cost per bad tenancy: R93,500 – R146,000
Expected annual loss (one property, one tenant turnover): R14,000 – R22,000

With screening (using Indlu at R99/mo):

Annual cost: R1,188
Reduction in bad tenant risk: estimated 70-80% (based on industry data showing screened tenants default at significantly lower rates)
Expected annual loss after screening: R2,800 – R6,600

Net saving: R8,000 – R18,000 per year, per property.

For a landlord with three properties, that’s R24,000 – R54,000 per year in avoided losses — from a R1,188 annual investment. That’s a return of 20x to 45x.

What Good Screening Looks Like

Effective tenant screening doesn’t require a law degree or hours of phone calls. A structured process covers:

Written application — standardised form collecting all necessary details
ID verification — automated Home Affairs check
Multi-bureau credit check — TPN, TransUnion, and Experian for a complete picture
Employment and income verification — payslips, bank statements, employer confirmation
Previous landlord references — structured questions, not just “were they okay?”
Affordability assessment — rent-to-income ratio below 30%
POPIA compliance — documented consent before any data processing

The entire process should take days, not weeks. With the right tools, most of it can be completed in a single sitting.

Prevention Is Cheaper Than Cure

South African landlords collectively lose billions of rands each year to tenant defaults, property damage, and eviction costs. The vast majority of these losses are preventable.

Screening isn’t a luxury for large property companies — it’s a basic risk management practice that every landlord, from a single-unit investor to a portfolio owner, should treat as non-negotiable.

The question isn’t whether you can afford to screen tenants. It’s whether you can afford not to.

Protect your investment from day one. Screen tenants with Indlu from R99/mo — multi-bureau checks, AI risk scoring, and POPIA compliance built in.