Seeff comments on the pandemic-induced WFA trends affecting the property market
According to the Seeff Property Group, the pandemic-induced WFA trends significantly promoted a wave of the cottage and home-based small business industries. In light of this development, many property practitioners experienced an influx of residential property buyers looking for spaces to turn into multipurpose WFA homes and run small businesses.
Buyers Face Caveats to WFA Property Investment
Buyers face certain caveats about these investment properties. The most common one is zoning rules set by the local municipalities and corresponding land use guidelines and regulations. These specify that buyers should primarily use the space for residential purposes if the property falls into a common residential zoning area. The business operator, who in most cases doubles as the buyer, must reside on the premises - and as per regulations, no more than three employees may engage in business on the property.
The type of business or profession that buyers choose to run from the new property will also affect the decision to buy. Consulting or digital businesses that involve freelance work and frequent travelling for client visits remain a common concern. In contrast, home retail businesses that involve product manufacturing or client visits to the premises are a primary concern due to problematic aspects such as noise levels, number of visitors, and available parking space.
In light of these challenges, Seeff urges buyers to remain upfront and honest with property practitioners regarding the plans and purpose of potential properties before purchase.
Local Councils Amend Zoning and Regulations to Allow for Greater Flexibility
Local councils recognised the growing need for small business growth and subsequently amended local zoning and regulations to provide increased flexibility; however, these amendments were not to enable loud business operations or visitor and parking violations.
In Cape Town, basic residential zoning now supports the WFA trend and allows homeowners to run several businesses, subject to certain provisions. Some of these include:
- Airbnb
- B&B
- Crèche
- Guest house
- Religious place of worship
- SME
Despite these new regulations and increased flexibility, the property's primary purpose must remain as a residence where the business owner resides.
Airbnb Provides New Business Opportunities for Homeowners
The arrival of Airbnb changed the game and provided many business opportunities for prospective homeowners, particularly as an excellent way to generate additional passive income. Homeowners should still review the local council regulations that remain area-specific, but fortunately, Cape Town homeowners face no restrictions, and the rules allow for a maximum of six guests at one time with a limit of three rooms in use.
Homeowners looking to run a small crèche or daycare centre can allow up to six children on the property; they must, however, apply for council permission to increase this number and extend the property to accommodate the business if necessary. There are often strict signage regulations on the property or boundary wall, so homeowners should remain aware and adhere to these guidelines to ensure their home-based business does not disturb their surrounding neighbours.
Seeff encourages buyers to look for a property suited for running a business from home; even buyers who want to work from home should consider a separate space. Buyers with families might wish to find a property with an extra room or area to convert into a home office or study. Some properties offer an outbuilding ideal for conversion into a garden office or studio.
Whether you want to buy a property for home, work or both, making that first move is always difficult. Let Seeff guide you through the process - contact our qualified property practitioners today. If you enjoyed reading this blog, consider reading Seeff's blog on why buying property in the current market is better for more expert insights.
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