Are you considering renting out one of your properties?
While this is an exciting venture that has the potential to secure extra cashflow, there are some important things to keep in mind.
These 8 helpful tips will help you along the way:
How much rent should I charge?
The maximum rent you can charge is ultimately determined by three key factors: the current supply of homes for rent, the demand for rental properties, and the quality of your property. A word of warning here: do not be drawn in by over-inflated numbers. The reality is that rent values change all the time, so there is no hard and fast rule. It is important to take advice from your estate or rental agent.
How long should it take to let my property?
Generally, you should have enquiries within the first week of marketing your rental property. Viewings will then typically take place in the first 10-14 days. If you haven’t had an offer within two weeks, take action on one or more of the following: fix any niggling issues that might be deterring tenants; spruce up your property inside and out; be more flexible – for example, perhaps think about accepting pets; and reconsider the asking rent.
Should I allow pets in my property?
You are under no obligation to accept a tenant with a pet, so the choice is entirely yours. However, you will narrow down your potential market by not allowing them in your property. The trend for tenants with pets is most definitely on the rise. Remember that if you own a sectional title unit, the body corporate ruling on pets needs to be adhered to.
What do I need to do to prepare my property?
Your property needs to be fit to rent from day one. That means making sure it is in good repair and working order and ready to be lived in. If you are letting a fully furnished unit, you can only take the inventory once the property is 100% ready to let. It must then be checked and agreed by both you and your tenant, before being signed and dated.
Do students trash rental properties?
Letting your property to students is often no riskier than letting it to young families in terms of damage. The key with all lettings, and especially those to students, is to prepare the property well:
Buy strong, durable furniture – no flat-packed furniture or sofas with silly legs.
Manage tenants carefully – keep a light touch, but make sure you are somewhere in their subconscious!
Don’t leave everything to check-out – conduct detailed inventories and inspections along the way.
Address issues early – involve parents or guarantors if damage or cleanliness issues need addressing.
How do I assess damage?
There are four issues to consider when assessing damage at the end of a tenancy:
Fair wear and tear;
Betterment – in other words, you cannot use your tenant's deposit to replace old and worn items;
Evidence – and this is where a thorough inventory and ingoing inspection are vital; and
Average lifespan – after all, carpets and furnishings do have a natural 'shelf life'.
You may deduct money from the damages deposit at the end of a tenancy to cover damaged or missing items. However, this is subject to strict rules laid down by the lease agreement in line with the Rental Act. In law, the deposit remains the property of the tenant.
As long as you are making reasonable deductions backed by evidence you should be confident in your assessment of damage.
Who maintains the garden?
It is up to you to decide who maintains the garden; however, it is typically the tenant who is responsible for general maintenance, so remember to include images of the garden in the inspection/ inventory. You may want to consider employing a gardener – the cost can often be recovered in the rent, or by sharing the load with your tenant. You could commit to taking care of trees and shrubs while the tenant looks after the lawn. At the end of the day, tenants cannot be held responsible if plants die.
What makes a good investment property?
That is the million rand question! Here are some pointers to give you the best chance of bagging a good investment property:
Do your homework and research the market thoroughly.
Ensure your property will produce a steady income stream.
Understand the running costs of owning a rental property.
Do the maths – be confident that you could cover any bond payments if the property became vacant.
A final point: Consider appointing a good letting agent and property manager. It can be difficult to view a property as an investment rather than your personal home, and it can also be a headache to keep on top of matters relating to your tenants and the property.