Could the weaker Rand benefit SA property?
Apart from other economic factors such as the interest rate and the level of inflation, South Africa’s exchange rate is one of the most vital aspects to the health of the country’s economy.
Over the last few years the rand has depreciated significantly, causing concern among consumers. However, is it possible that the weakening rand could be a good thing for the country? While most would look at the current exchange rate as an indication of the sad state of the country’s economy, a weakened currency can have its benefits.
This is according to regional director and CEO of RE/MAX of Southern Africa, Adrian Goslett, who says while a weaker rand makes imported items and overseas travel more expensive for South African consumers, the current exchange rate will be attractive to foreign investors, provided of course that foreign sentiment towards the country remains positive.
Landlords to cash in as rental demand rises in 2016
Landlords can look forward to rising rental demand in 2016, and this may well increase the number of investors who see good opportunities in buying homes to let according to Andrew Schaefer, MD of national property management company Trafalgar, who says the demand for rental units is expected to rise in the coming months, thanks to higher interest rates and greater economic uncertainty at home and abroad.
“Rising rates always put a strain on affordability and make it more difficult for prospective buyers to qualify for home loans, especially if they are first-timers who also need to save large amounts of cash to pay a deposit and transfer costs,” he says.
“Many such consumers are thus likely to remain in rental accommodation over the next two years instead of buying their own homes.
Seeff KZN recruiting and training graduates
Stringent qualification and professionalism standards now being enforced in the property industry have reduced the number of registered estate agents quite significantly.
Figures from the Estate Agency Affairs Board indicate that this reduction has been in the region of approximately 60%, from 96 000 estate agents in 2007 to the current figure of about 38 000 across the country according to Dave Jones, regional manager of Seeff KwaZulu-Natal (KZN), who says Seeff KZN is actively attracting graduates into the real estate industry as their first career choice through a structured recruitment and career path process.
Oobainsure launches rental insurance with "Zero Deposit"
oobainsure, the insurance arm of bond originator ooba, has announced the launch of Rent Protector, a new product that will offer tangible financial benefits to tenants, landlords and agents according to oobainsure’s national sales manager, Alex Bartels, who says oobainsure’s ability to insure landlords against missed rental payments means they don’t have to demand a deposit to cover against potential losses.
“This ‘Zero Deposit’ option for tenants who do not always have the ability to pay one or two months’ rent upfront to secure a lease results in reduced financial risk for all parties involved.”
Bartels says Rent Protector offers cover for up to three months’ rental should a tenant abscond or remain in unlawful occupation, and up to R50 000 in legal fees associated with eviction, with Rent Protector managing the process on your behalf.
6 Guidelines for setting the right rental price
It goes without saying that an astute property investor will want to make a fair return on their rental property investment. In order to do this, the property investor will need to begin by establishing an accurate rental value to charge their tenants according to Grant Rea, RE/MAX Living Rental Specialist, who says when the property investor has an accurate market-based rental price, they will attract a good calibre, long-term tenant.
Rea says the combination of a fair market-related rental price and attracting a responsible tenant is what will guarantee the consistent long-term return from the rental property investment.
Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, says whether setting the asking price to sell a property or letting one out, finding the right price is highly important to ensure that the property appeals to the right buyer or tenant.
Landlords must get new credit report from tenant
If you’re a residential landlord currently renewing any leases, you should insist on a fresh credit check on your existing tenants before you sign anything - and perhaps even consider asking them to top up their deposit.
This is according to Chas Everitt Property Rentals CEO Greg Harris, who says even if your tenants have been good payers up until now, everyone’s budget has been put under strain in recent times by the rising cost of living, and many consumers have been taking on additional debt in order to cope.
Harris says they may well have more credit card debt or more store debt now than they did when they first moved in, especially after the festive spending season. They may even have taken out a new personal loan, and with an interest rate rise imminent now because of the low value of the rand, that could spell trouble.