The South African rental market is suffering and is reflecting negative growth for the first time in over eight years according to thePayProp Rental Index annual review for 2020. Landlords will need to ensure that their rental property is attractive as possible to attract qualified tenants in the current market.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett largely attributes this decreased demand within the rental market to the record-low interest rates that are incentivising first-time buyers to enter the market. “In many cases, the repayments on a home loan are lower than the rent one would pay on the same property. Landlords will need to bear this in mind when they set their rental amount,” he advises.
1.To work out what a fair rental amount would be, Goslett recommends considering what the landlord is currently paying on their home loan to get an indication of what their tenant could be paying if they choose to purchase a home of similar value. “Landlords could also use a bond repayment calculator, like the one found on BetterBond’swebsite, to find out what the repayments would be on a home of similar value. If the rent the landlord is charging amounts to more than the tenant would pay on a bond for a similar home, then this will make the property less attractive to tenants,” he explains.
2. Beyond setting an attractive rental price, Goslett suggests that landlords invest some money into updating and fixing the home to make it more appealing to tenants. “Right now, supply outweighs demand. We are no longer facing situations where landlords have multiple tenants fighting to have their application be the one that gets accepted. Instead, landlords will need to make their homes as appealing as possible to ensure that their listing is the one that tenants select over the many other vacant listings,” he states.
3. As a last word of advice, Goslett recommends that landlords take the time to ensure that professional photographs are taken of their home so that the listing stands out online. “More so than ever before, the house-hunting process begins online – so much so that our website statistics for 2020 reveal that the traffic to our site has increased by 30,86% when compared to 2019. Landlords who do not take the time to ensure that their property is marketed correctly online are dramatically decreasing the true marketing potential of their homes,” he concludes.