Good news for aspiring landlords with their eye on buying property to rent: the residential rental market has stabilised, with fewer tenants in arrears and a promising increase in rent compared to previous years. While economic pressures remain, the rental market is recovering; specifically the luxury rental market, as Seeff reports that properties in prestigious areas such as Constantia Upper and the Cape Town Atlantic Seaboard are reaping healthy monthly rentals of more than R100,000.
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There’s no reason why you can’t make money as a landlord if you consult with an experienced Property Practitioner and understand the market before you purchase your first rental property.
Seeff shares four ways to make money as a landlord in South Africa today.
Tenants can make or break the success of your rental. As a landlord, you want to choose reliable people who will make life as a landlord worthwhile. If you choose the wrong tenants, you risk losing money, either because they cannot pay and you have to consider eviction or because they cause damage to the property, and you must now repair it. An expert Property Practitioner can help you vet tenants so you make the best choice.
When choosing a tenant, consider the following:
When you do find fantastic tenants, keep them. This means following through on your responsibilities, communicating with your tenants when they need something fixed or have questions, and making the home fit for them to live in. You don’t want to discover the perfect tenants only for them to move out because you never got around to fixing the plumbing or installing an alarm.
Consider your long-term goals. If you’re serious about property investment and how to make money as a landlord, you’ll need to make an effort to increase the value of your rental properties. You can achieve this through thoughtful renovations and upgrades and necessary maintenance. Whether you plan to sell the properties one day or simply want to charge a higher rental, you should be willing to pour some money into your properties.
If you maintain your properties to the highest standard, they can increase in value. There are several ways to increase the value of your properties:
Ah, the power of seasonality. There’s nothing like an influx of tourists, summer heat, and school holidays to promote short-term rentals such as Airbnbs, guest houses, and hotels. If you’re wondering how to make money as a landlord in South Africa, why not consider short-term rentals for that rush of quick and seasonal cash?
There are several things to consider when purchasing a property for short-term rentals:
It’s tempting to set a high price for your rental and expect the cash to come in. However, the price isn’t 100% up to you, not if you actually want to attract and secure tenants. Your price needs to be high enough that you make a profit yet competitive enough that tenants choose your property over another property.
We suggest you speak to a Property Practitioner before setting a price. A local Property Practitioner will be familiar with your area and the current state of the real estate industry and share what you can expect to charge as your rental price.
Are you ready to become a landlord and launch a profitable career? Read our blog on a landlord’s responsibilities for more guidance. If you have questions or concerns, this piece on tips for first-time landlords might be helpful, too.