HOW TO MAN­AGE EX­PENSES

Pretoria News Weekend - - ENTERTAINMENT -

WHEN buying a sec­tional-ti­tle prop­erty, Michelle Dick­ens says you need to make sure the scheme is fi­nan­cially sound, and you should ask about pos­si­ble spe­cial levies.

You also need to look at the size of the com­plex, be­cause, the larger the com­plex, the more the risk of own­ers de­fault­ing on their levy pay­ments is spread across all own­ers.

Look at how well the other units in the sec­tional-ti­tle scheme or the houses in the area are main­tained. “It’s no good hav­ing an oa­sis of a well­main­tained prop­erty in an area where the sur­round­ing prop­er­ties are badly main­tained and there is a high rate of delin­quency: you are un­likely to at­tract a good-qual­ity ten­ant,” Dick­ens says.

The more owner-oc­cu­pied prop­er­ties in a com­plex, the bet­ter, she says, be­cause owner-res­i­dents tend to take bet­ter care of units and be ac­tively in­volved in the man­age­ment and main­te­nance of the com­plex.

Dick­ens says that nowa­days land­lords can re­cover ex­penses from sec­tional-ti­tle ten­ants that they were not able to in the past, in­clud­ing wa­ter, sew­er­age, elec­tric­ity, refuse re­moval and park­ing. She em­pha­sises that th­ese ex­penses must be de­tailed in the lease agree­ment and can­not be sud­denly foisted on a ten­ant.

You need to be dis­ci­plined in how you col­lect the rent (it’s best, for ex­am­ple, to is­sue writ­ten monthly in­voices) and how you deal with latepay­ing or non-pay­ing ten­ants. The quicker you take ac­tion against non­pay­ment, the less money you lose, Dick­ens says. (On the le­gal process re­quired to re­move ten­ants, see “How to evict a ten­ant (law­fully)” on the Per­sonal Fi­nance web­site, www.pers­fin.co.za.)

Hav­ing good-qual­ity, long-term ten­ants is the ideal, be­cause you have a reg­u­lar in­come and fewer pe­ri­ods when the prop­erty is va­cant. To at­tract or keep such ten­ants, it is worth be­ing slightly ne­go­tiable on the rental.

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