Renting out a property can make good business sense and can generate considerable income - but only if handled correctly and professionally.
The South African rental market is going through an extremely tough time, with rental growth at historic lows as tenants experience severe financial pressure due to loss of income as a result of the Covid-19 pandemic.
“This situation makes it more difficult than ever to secure reliable, trustworthy, and financially responsible tenants," says Private Property Brand & Marketing Executive, Tracey Lee Miller.
How to attract new tenants
To make your rental property attractive to the kind of tenants you want to keep, make sure your property is in mint condition.
• Invest in good materials and finishes to create a good first impression. This should also result in fewer repairs. Frequent repairs can prove costly in the long run and may mean your property stands empty for long periods.
• Walls should be unmarked and free of nails. Fill in any holes and apply a fresh coat of paint. Neutral shades are best for interior walls in rental properties.
• Update kitchens and bathrooms if these are looking worn out.
• Carpets should be professionally cleaned or replaced before prospective tenants are invited to view the property. Laminated wood flooring is a good option for rental homes.
• Gardens should be neat and low-maintenance, as few tenants are keen gardeners.
In a slow market, it can be tempting for landlords to let the vetting process slide to fill a vacant property more quickly, but this will put your investment at risk. “It’s far more difficult - and costly - to get rid of unreliable or non-paying tenants than it is to place reliable ones,” says Miller..
Even if you will be managing your rental property without the help of an agency, it could pay you to appoint one just to vet applicants. Reliable agencies have access to credit and reference checking facilities that aren’t available to private landlords. This should minimise the likelihood of signing up tenants who don’t pay their rent or may damage your property.
Keep existing tenants
For any landlord, the higher the rental on a property, the better the investment performance. But this only applies if the property is occupied, as a property that stands empty is a drag on finances. This means that landlords who have good tenants that pay their rent on time and look after the rental property should do their best to make sure such tenants are retained when the lease expires.
“Two key factors in retaining desirable long-term tenants are correct pricing and regular maintenance of the rental property.”
Landlords can achieve this by:
• Keeping rental increases at reasonable levels – or not at all - rather than insisting on maximum increases each year. Reliable rental agents in the area should be able to help you decide on the right rental for your property.
• Attending to requests for repairs and maintenance with minimal delay.
“Despite the difficult market conditions, landlords who follow best practices are sure to weather the storm and see their investments pay dividends in the long term,” concludes Miller.