The rental market in South Africa has always been a tricky prospect to understand, and as of late, the rental market has been presented with new and exciting challenges. The rental statistics have managed to achieve sustained growth in the level of annual increases, on the other hand, the cost of living, transport, healthcare and food have all had major increases revealing just how tough life currently is for the consumer.
Renting isn’t the most enjoyable experience adulthood has to offer whether you’re new to adulthood and looking to make your rent or you’re a seasoned veteran still try to make it work rental is tough whichever side of the fence you sit. Whether you’re the tenant and or you’re the landlord you are bound to face some challenges, some you’re aware of and some you’re not…yet
Being a landlord means taking on the job of the world’s worst boss, taking the stigma of not liking your boss even further by having someone boss you about your own home. Technically you’re just renting it but for a small fortune and possibly the majority of your income – so you’re allowed to call it home. An enormous amount of trust and a well thought out contact is needed to ensure a happy and healthy relationship between tenant and landlord. Whether you’re looking to rent to the cute newlywed couple from your church or a foreign tourist for summer here are some helpful tips to ensure being the landlord doesn’t make you the world’s worst boss.
Sense or Senseless
Does it make financial sense to invest into a Buy-To-Let Property? It’s important that the investment doesn’t put you under any financial strain as it can make the process more stressful for both you and your tenant. Look at the annual rental income minus your related and expense costs and divide this by the price you paid for the property, this will give you an indication of the expected revenue yield you’ll make. Also add in the additional cost that you are bound to end up paying for, like maintenance, transfer fees and legal cost. It is of the utmost importance that you ensure that you have some legal representation to assist you in the rental of your property as the South African legislation makes it almost impossible to evict a non-paying tenant so it’s important to have all the necessary clauses in your lease to ensure that you are protected.
You need to be aware of how the rental market is for your consumer and how you can best provide them with a fair and transparent agreement that benefits both you and your client. Since 2004 the average rental rates have gone up 10.4% with salary increasing on by 4%, currently, people who are looking to rent don’t have enough disposable income to afford higher rental rate but due to limited availability of stock they have to be prepared to pay more to secure a place to live. This is all valuable information which needs to be considered when looking to rent.
Location, location, location. Location is vital in the rental market and makes a huge difference when seeking to gain returns. Property in the right location for the right price for the right target market can be a more than worthwhile buy-to-let-investment can generate a decent yield. Your area should be well situated and should have a real supply and demand for rentals as well as be located close to transport and other amenities.
There is going to be a few extra costs that you’re going to have to pay for, not just the support, but transfer and legal fees too. It’s important to remember the value of good consistent maintenance of your rental. No one wants to live in a rundown, unkempt apartment that is outdated ensure that you make an effort to check up and update various elements within the property. Things like updating the property and add value provide more agreeable tenants when it comes to annual rental increases. Minor changes make a big difference, with updates on windows, flooring, walls and ceilings can not only benefit the relationship you have with your tenant but also add value and longevity to your investment.