A detailed risk analysis in the latest PayProp Rental Index highlights a significant challenge for landlords and rental agents: more than a quarter of South African rental applicants were classed as high-risk in Q1 2025.
Based on data from the Tenant Assessment Report, PayProp’s market-leading tenant screening tool, 26% of prospective tenants fell into the scoring system’s highest risk bracket, up from 25% a year ago.
“Landlords are seeing improved returns from healthy rental price growth in 2025, but it’s important not to get complacent,” says André van Rooyen, PayProp SA Head of Sales. “Tenant affordability is lower due to the cost of living in many provinces, and with one in four applicants potentially presenting a payment risk, thorough vetting is non-negotiable.”
Traditional credit checks are only part of the picture when it comes to assessing a tenant’s reliability in the payment stakes. A credit report scores applicants based on their debt repayment history, but often don’t take rental payments into account. In contrast, PayProp combines credit scoring with rental payment histories captured from the platform to reveal where tenants fall on the risk spectrum. A PayProp analysis ahead of a recent training webinar found that the Tenant Assessment Report is 94% better at predicting bad tenant behaviour than a traditional credit score when applied to a sample of real tenant data.
In Q1 2025,
- 39.6% of lease applicants were rated minimum-risk
- 20.0% were low-risk
- 14.5% were medium-risk
- 26.0% were high-risk
Tenants’ uneven distribution across the risk spectrum suggests that rental applicants are becoming more concentrated at both ends of the risk scale, making careful tenant selection more important than ever.
Income trumps all as risk predictor
As can be expected, income is the strongest determinant of tenant risk. Among applicants earning R80 000 or more per month, 60.6% were classed as presenting minimum risk and just 12.2% as being high-risk. In the lowest income bracket (R10 000 - R20 000), only 23% qualified as minimum-risk, while 37% were high-risk.
“Affordability is one of the first things any agent will check, and this helps demonstrate why,” says van Rooyen. “It also means that careful vetting is even more essential for lower-priced properties, as applicants are more likely to fall into lower income brackets. However, there are high-risk and low-risk tenants in every income bracket, and using smarter tools helps agents identify low-income, low-affordability tenants who nevertheless have perfect payment records.”
Youth equals uncertainty
Age also plays a clear role. The 20 - 29 age group showed the lowest share of minimum-risk tenants (29.6%), likely due to thinner credit files and shorter rental histories. However, despite being unknown quantities in normal credit scoring terms, this group tends to have more disposable income after debt and rent, making them potentially better prospects than raw scores may suggest.
In contrast, 61.3% of applicants over 60 were classified as presenting minimum risk, and tenant risk declined sharply for all age groups over 50, which indicates a pattern likely linked to more stable financial positions and mature credit profiles.
Debt dynamics by gender
Interestingly, the report finds only slight gender-based differences in tenant risk, despite women earning roughly 80% of what men do according to Stats SA. 40.1% of men were assessed as minimum-risk, compared to 39.1% of women. One possible explanation is that women spent 3.2% less of their income on debt repayments than men, improving their overall affordability profile.
While trends by income, age and gender offer useful insights, Van Rooyen reiterates that every tenant is unique. “Each demographic contains both high and minimum-risk individuals,” says van Rooyen. “That’s why risk reporting based on proven payment behaviour is essential for agents managing tenant selection. It’s not just about reducing risk for agents, it also ensures that good tenants who pay their rent reliably can go to the front of the line, no matter their income levels or what’s left after servicing current debts.”
“With more rental applicants falling into the high-risk category than a year ago, the days of relying solely on gut feel or credit scores are behind us. The smartest agencies are combining data sources for a full-circle view of tenant reliability.”
