This is tantamount to never starting any business, because of a perceived high risk of "bad" customers who write fraudulent cheques or neglect to pay their accounts on time.

While every business owner can probably tell a story or two about unscrupulous customers who do not pay their accounts, write fraudulent cheques or pay with counterfeit money, this is hardly a reason for people not to start their own businesses. It is a well-known and common business risk, and business owners simply put in place systems to manage the risk - for example, by not accepting cheques, requiring a deposit or insisting on cash on delivery. Even so, most business owners would admit that these customers are in the minority, and most customers are honest, decent people.

"It is no different in the business of buy-to-let property," says Dr Koos du Toit, CEO of the P3 Investment Group.  "Most of us have, at some time or another, rented someone else's property. Did you wilfully wreck your rented accommodation? Did you go to great lengths to delay or skip your rent and utility payments? Urban legends of delinquent tenants abound, yet experienced property investors will tell you that they are by far the exception and not the rule."

This is backed up by solid statistics. TPN Credit Bureau's latest Rental Payment Monitor report shows that the percentage of tenants in good standing with their rental payments was 81% in the first quarter of 2011. Even at the lowest point of the economic recession in 2009, this percentage stood at 71%. So despite the horror stories and urban legends, the reality is that the vast majority of tenants nationally are paying on time and in full.

"Of course, there are some unsavoury characters in the world, but there is no reason for a property investor to do business with these potentially delinquent tenants. To avoid such a scenario, a property investor, just like any other business owner or investor, puts systems in place to manage the risk," explains Dr du Toit. "These 'systems' do not even have to be created or tested through trial and error - they already exist, created by experienced property investment experts and can simply be implemented." 

As a buy-to-let property investor, you essentially have two options: appoint a rental management company to screen, place and manage your tenants; or empower yourself with the tools and knowledge to manage your tenants yourself. Whichever option you select, a Plan B is always a good idea: and in this case it refers to rental insurance.

Opting to appoint a rental management agent is almost always the best choice: professional, reputable rental management agents have the expertise, experience and resources to deliver a professional service to both yourself and your tenant, at a very reasonable fee - usually 8 - 10% of the rental, which should ideally be covered by the rental charged.

However, some property investors prefer to manage their own tenants. It is certainly an option, provided that you are willing to put in the time and effort to do so professionally. This entails keeping up-to-date with the continuously changing legislation, thoroughly screening each potential tenant before signing an up-to-date and water-tight lease agreement, and taking swift action when a default or breach occurs.

"Over many years of hands-on tenant management experience, P3 Investment Group has developed a complete rental management process, which neutralises tenant risks to a large extent," explains Dr du Toit. "By simply following a specific process and taking a few simple steps, one can significantly reduce the risk of getting a bad tenant in the first place, and manage a tenant in a fair and profitable manner. The process is detailed in the P3 Rental Management Kit, a comprehensive rental management system that covers everything from the implications of relevant legislation to checklists and sample agreements and addendums, and 'streetwise' tips for getting rid of problem tenants."

Whichever option a property investor select, proper risk management demands a Plan B, which is simply rental insurance. "The comprehensive rental insurance provided by the P3 Investment Group, underwritten by Infinity Insurance and offered in association with Tenrisk, is designed specifically to cover the risks faced by buy-to-let property investors and not only guarantees the rental payment - regardless of whether or not the tenant pays on time or at all, but also provides for the costs and legal expertise when evicting a tenant," explains Dr du Toit.

"Many so-called 'experts' will vociferously advise against an investment in buy-to-let property and will relate hair-raising 'real-life' stories about 'terrible tenants'. These assertions are not only exaggerations; they are also untrue to a large extent - as the recent TPN statistics show. Be wary of taking advice from those who make sweeping statements about investment classes they have no knowledge or experience of, especially when these are backed-up by 'urban legend' tales and no hard statistics. Rather investigate the facts and seek the opinions of those who have actually invested in buy-to-let property using a tried-and tested system. This way, you at least have an opportunity to draw your own conclusions, make your own decisions and take control of your own financial future," comments Dr du Toit.

"Just as you wouldn't let a business opportunity of a lifetime pass you by because some customers might try to get away with fraudulent or non-payment, don't simply write off buy-to-let property investment because of the possibility that you might run into a delinquent tenant. A number of risk management solutions have evolved over the years as property experts identified and refined the best ways to mitigate, manage and even eliminate this risk - as experts do in every business sector. All that remains for property investors to do, is to implement these widely available and often surprisingly affordable risk management solutions. Following a system that has proven effective and successful, not only significantly reduces the risk you face as a property investor, but it exponentially increases the probability of reaping rich rewards."