Finweek English Edition - - INSIGHT -

Arm your­self with a level-headed, busi­ness-fo­cused ap­proach. Leave emo­tions out of the buy­ing process. These are, af­ter all, prop­er­ties that other peo­ple will be liv­ing in, not you. Take a long-term view. Do your re­search. Don’t just jump into the prop­erty mar­ket blindly.

Ide­ally, buy in an area and mar­ket you know and where the rental mar­ket is strong.

De­ter­mine what sec­tor of the mar­ket you wish to tar­get e.g. skilled, up­wardly-mo­bile pro­fes­sion­als and cou­ples, fam­i­lies with chil­dren, stu­dents or the cor­po­rate mar­ket.

Iden­tify ar­eas that have ac­cess to busi­ness hubs, schools, uni­ver­si­ties and col­leges, or trans­port links, as these re­late to your iden­ti­fied mar­ket sec­tor.

Con­sider ar­eas that are primed for sig­nif­i­cant growth and where hous­ing sup­ply is lim­ited. These are typ­i­cally ar­eas where de­vel­op­ments are in the pipe­line or re­gen­er­a­tion is tak­ing place.

Smaller two- and one-be­d­roomed prop­er­ties that are typ­i­cally priced to ac­tively at­tract young pro­fes­sion­als are cur­rently gen­er­at­ing the most growth.

Al­ways en­sure you have a cash buf­fer in case of ten­ant de­faults, rental voids or un­ex­pected prob­lems.

Un­less you are pre­pared to take a 24/7 hands-on ap­proach, a let­ting or man­age­ment agency might be prefer­able es­pe­cially if you don’t live near your rental prop­er­ties. While fees vary and de­pend on the rental man­date, agents could charge a 7% fin­ders fee and 10% (plus VAT) monthly man­age­ment fee of the rental in­come that in­cludes sourc­ing, vet­ting the ten­ant and deal­ing with main­te­nance is­sues.

If you are de­ter­mined to shun a rental agency, en­sure that you thor­oughly check ref­er­ences of po­ten­tial ten­ants, ob­tain a de­posit, draw up and en­sure you ob­tain a signed con­tract from the ten­ant and ad­here to all the re­quire­ments of the re­cently amended rental laws (see is­sue 7 Au­gust 2014).

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