select
|

Apartment goals: Affordable might just be perfect

Everyone looking for an apartment to rent has a wish-list, but most prospective tenants will have to settle for the best compromise between that list and their budget.
 
“It’s all very well to live in an upmarket building with great security in a sought-after location, and have all the space and views you wanted, but if the rent is so high that you have to live on two-minute noodles and scrimp and scrape to pay your other bills, that is hardly an idyllic lifestyle,” says Greg Harris, CEO of Chas Everitt Property Rentals.
 
“So our advice is that those about to go apartment hunting should first work out a realistic budget and commit to it, so that they view and compare only those units that they can comfortably afford and don’t get distracted by those that are beyond their means. If they are honest about what they can afford, it will also be much easier for rental agencies such as Chas Everitt Property Rentals to assist them to find the right apartments.” 
 
It is generally accepted, he says, that rent should equal no more than 30% of a tenant’s take-home pay – that is, their salary after tax and other deductions – so that they can also cover all their other monthly expenses such as transport, food, electricity and water, car and other debt repayments, school fees and cell phone costs without financial stress, and hopefully even be able to save something for emergencies or retirement.
 
“So according to the BankservAfrica Disposable Salaries Index (BDSI), which shows that the average disposable salary in July was R14 154 (compared to R13,894 in June), the average earner planning to rent an apartment should be budgeting no more than around R4250 per month.”
 
And indeed, notes Harris, the latest PayProp Rental Index (Q2 2017) shows that although the national average rental currently being paid is just over R7000, more than 35% of all tenants across the country actually do rent for less than R5000 a month, with the next biggest percentage (31,75%) renting for between R5000 and R7500 a month.
 
“One must also remember that in KwaZulu-Natal, Gauteng and the Western Cape, the three most economically active provinces, the average salaries tend to be higher, enabling tenants to pay higher rents without necessarily breaching the 30% of disposable income ‘limit’. The average rentals in these regions are R7194 a month, R7482 a month and R8231 a month respectively.”
 
In fact, he says, South African tenants seem to be pretty good at sticking to the limit, as the PayProp statistics also show that male tenants currently spend an average of 23,8% of their net income on rent, while female tenants spend an average of 27,7%, owing to the fact that their salaries are generally lower.
 
“Nevertheless, it never hurts for tenants, and especially those new to the rental market, to draw up a list of all their monthly expenses and see what rent they can afford – or if the rent they are currently paying is taking up too much of their disposable income and they should perhaps consider a move to a more affordable apartment.”
 
Harris says another important point for young tenants just starting out to remember is that they probably won't live in the same place for ever. “If you’re just getting started with your career, and moving into your first apartment, you will need to account for some additional expenditures such as utilities, probably furniture, and several deposits, so it may be a good idea to rent for even less than 30% of your take home pay.
 
“The great thing about renting is that when you get promoted, or your new business starts to grow, it is relatively easy to celebrate your success by moving to more upmarket accommodation.
 
“But in the meanwhile, you may well find that no matter what’s on your wish-list, the perfect apartment is the most affordable one (as long it is also secure) – because it enables you to live comfortably - and to sleep at night instead of lying awake and worrying about how to make ends meet.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 24 Nov 2017
      Demand for secure estate living in Hout Bay has risen sharply in recent years, precipitating a spike in development with estate homes now accounting for 20.24% of the property landscape with the launch of an exclusive new gated development on 26 November adding 20 more units to the existing 1250 estate homes.
    • 24 Nov 2017
      There are some things that money can’t buy – spectacular views from Mouille Point to the V&A Waterfront and a trendy and lively neighbourhood that encapsulates the very best of the Cape Town lifestyle.
    • 24 Nov 2017
      Tshwane’s four-bedroom Mayoral mansion, nestled among ambassadorial residences in the upmarket suburb of Muckleneuk, fetched R5.1 million after spirited bidding at High Street Auctions’ final sale of the year.
    • 23 Nov 2017
      Reserve Bank Governor, Lesetja Kganyago, said that the Monetary Policy Committee had once again decided to let the interest rates remain unchanged with the repo rate at 6.75%, and the prime lending rate at 10.25%.
    • 23 Nov 2017
      As the holiday season approaches, most of us are counting the days until that year-end bonus hits our account. There’s nothing quite like a little bank balance booster to get us in the holiday spirit.
    • 23 Nov 2017
      The Adelphi Centre (now entitled “ARTEM") in Sea Point, Cape Town, is being extensively renovated, and once complete will offer an ultra-luxurious galleria style shopping centre unlike any other seen on the Atlantic Seaboard or in Cape Town.
    • 23 Nov 2017
      If you are looking to sell your home in today’s real estate market, there are certain things that you need to include both inside and outside your house. Today’s generation of home buyers is looking toward a more eco-friendly, energy and water conscious home, and if your house stands out then you are more likely to be able to sell it.
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK