Increased demand for rental properties in northern Johannesburg

The northern suburbs of Johannesburg have been exceptionally popular among both property buyers and tenants in recent years due to the amenities, schools and access to business nodes and transport routes the suburbs in this region offer.

On the rental side of the property market, demand for secure properties in the northern Johannesburg suburbs continues unabated. This is according to Sheree Peach, Residential Rentals Manager at Renprop, who says that the rental market is buoyant, with demand for well-priced, well-appointed and well-managed apartments continuing to increase, despite the current flat economy and trading conditions.

“While initially the demand for rental properties was underpinned by the lack of 100% bonds being approved for buyers, especially first time buyers, now it seems that a shortage of stock available for purchase is influencing the market. We are finding that buyers, especially young professionals, are waiting for the construction of new developments to catch up with demand. In the interim, these buyers are looking for rental properties to occupy while they wait to purchase a new sectional title property off-plan,” says Peach.

She notes that many potential buyers are also renting while they are saving up for a deposit, or waiting until they earn enough to qualify for the home loan amount they require.

Peach says that the ongoing demand and limited supply of rental stock is pushing the average rental prices up, with the average monthly rental price for properties within the northern Johannesburg region ranging anywhere between R6 000 and R10 000 per month, depending on the area and accommodation offering of the property.

While Peach says that there is demand for a wide range of apartments, one-bedroom, one-bathroom and two-bedroom, two-bathroom units in secure complexes tend to be the most sought-after rental properties in the northern suburbs of Johannesburg.

“The majority of potential tenants we are interacting with are looking for properties to rent in the Bryanston, Ferndale and Rivonia areas, with the most sought-after monthly rental price range sitting between R6 000 and R8 500,” says Peach.

Another ongoing trend on the rental side of the market, according to Peach, is that more and more investors, especially those who have a number of rental units in their portfolio, are starting to move away from self-managed portfolios and are engaging in managed mandates instead. “Through a managed mandate, Renprop Rentals manages the entire process from tenant screening and pre and post occupation inspections, to rental collection and maintenance management,” explains Peach.

She says that buy-to-let investors are mostly interested in the asset management of their rental units due to the strict process Renprop follows during the screening of tenants. “No investor wants to put their income stream at risk by signing a lease with a potentially unreliable tenant, or one who cannot afford to pay the rent,” says Peach.

She points out that it has become quite a challenge to determine the quality of the tenant and the credit check process is even more complicated now than it has been in the past.

“While many buy-to-let investors in sought-after areas are reaping the benefits of strong demand, it is prudent to ensure that a buy-to-let property is well managed to attract the right calibre of tenants and to protect the investment,” Peach concludes.

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