MONEY IN THE LET­TING GAME

CityPress - - Business -

Fran­cois Janse van Rensburg, the au­thor of Mak­ing Money Through Buy-to-Let, has built a suc­cess­ful prop­erty port­fo­lio and now runs a prop­erty con­sult­ing busi­ness to men­tor peo­ple who want to start in­vest­ing in prop­erty.

His book con­tains use­ful in­for­ma­tion and facts that will help an as­pir­ing prop­erty ty­coon nav­i­gate the world of prop­erty in­vest­ing. This in­cludes the le­gal process, find­ing and man­ag­ing ten­ants, as well as ap­ply­ing for fi­nance. He also pro­vides in­sight into the type of prop­er­ties that are the eas­i­est to rent out.

My one caveat is that Janse van Rensburg is clearly bullish on prop­erty in­vest­ing and one needs to tem­per the en­thu­si­asm with some re­al­ity. In his ex­am­ples, he bases his pro­jec­tions on a rental es­ca­la­tion of 10% a year an­num. Fig­ures from TPN – the credit bureau that pro­vides rental pay­ment pro­fil­ing and ten­ant vet­ting – show that rental es­ca­la­tions are run­ning at about 5%, and you are more likely to ex­pect a rental yield in line with in­fla­tion than 10% a year.

In re­sponse, Janse van Rensburg says that, in ar­eas where de­mand is high, one can in­clude es­ca­la­tions as high as 10% a year.

How­ever, that doesn’t deal with the is­sue of af­ford­abil­ity.

While a ten­ant may agree to a 10% es­ca­la­tion, when their salary is only in­creas­ing at 6% or 7% it will be dif­fi­cult for them to meet the fol­low­ing year’s rental in­crease. And if it is a good ten­ant, you will prob­a­bly not want to in­cur the costs re­lated to find­ing a new ten­ant, so will end up agree­ing to a lower in­crease.

The cur­rent eco­nomic con­di­tions in the coun­try re­main a risk when look­ing at Janse van Rensburg’s pro­jec­tions on the time it would take to pay off the prop­erty.

Nev­er­the­less, the book re­mains a good re­source for peo­ple who want to start buy­ing prop­erty. Sup­ple­ment it with in­for­ma­tion from TPN at tpn.co.za.

Ti­tle:

Mak­ing Money Through Buy-to-Let in South Africa ... us­ing very lit­tle of your own money Fran­cois Janse van Rensburg 9781776092055

R230 from takealot.com

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