These trends are reshaping retirement property in SA
People are generally living longer these days than they used to, with the result that the over-60 sector of the population is growing, and the need for senior accommodation is increasing.
However ‘retirement’ now is also a very different concept from what it used to be. In fact it, is now often called ‘refirement’ because it is so common to find people still working, or even starting new business ventures in their 60s, and still extremely active and independent well into their 70s, says Berry Everitt, CEO of the Chas Everitt International property group.
“Consequently, many are not ready to move to the old-age homes or care centres we traditionally think of as senior accommodation until they are over 75 or even 80, and the type of home being sought by those in their late 50s and 60s is extremely varied,” he says.
Here’s what’s going on in Gauteng’s rental property market
A recent survey sent to the RE/MAX offices operating in Gauteng revealed that tenants are facing affordability issues in many suburbs within this region.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, suggests that current economic conditions are likely to be the underlying cause for this ‘empty-pocket’ syndrome.
According to Stephanie Narainsamy, Broker/Manager of RE/MAX One, the rental market in and around Edenvale and Bedfordview currently favours tenants, yet some still struggle to find a property owing to their price expectations. “The average rental price in our areas is roughly R8 000 per momth. I would advise tenants to increase their budgets, as many have unrealistic expectations within the current market conditions,” says Narainsamy.
Landlords, your guide to dealing with tenant troubles
It starts off as the ideal investment. You leverage your good credit record on your primary property to buy a second property that you’ll let out. Essentially you’re getting somebody else to pay your home loan, after which you’ll pocket the income. What could go wrong?
“Quite a number of things actually,” Harry van der Linde, Rentals Principal at Leapfrog Pretoria East, cautions. “Property is a robust investment, but playing the buy-to-let game is almost never without challenges, which is why it is crucially important to approach it strategically, transparently and proactively from the start,” he adds.
And because forewarned is forearmed, simply being aware of the issues you’re likely to run into means you’ll be able to handle it more swiftly, should they arise at some point.
The most common problems Van der Linde and his team encounter with rental properties and tenants include those around payment, damage to the property, and more people living on the premises than the contract makes provision for.
He elaborates on some of these issues:
How much will the 0.25% rate cut save you on your home loan?
As was widely expected, the Reserve Bank decided this week to cut interest rates by 0.25 percentage points, amid indications that international oil prices could fall further and that slowing global growth could prompt a round of rate cuts by most major central banks.
Rudi Botha, CEO of national bond originator BetterBond, says this decision takes the repo rate to 6.5% and the prime lending rate to 10%, which for existing homeowners will translate into a saving of R16 a month per R100 000 borrowed. On a R1 million loan, for example, the saving would be R166 a month, and potentially almost R40 000 over R20 years. See below table: