select
|

Temporary relocation: should you sell or let your home?

In a tight economy employees must go where the work is - but that raises questions about what to do with your property when you are offered a contract in another city or country.
 
The options need careful consideration, says Martin Schultheiss, CEO of the Harcourts Africa property group. “The benefit of selling is that you make a clean break, while renting out your property means that you will have a home to come back to when the contract period is up – and that hopefully that home will have appreciated in value in the interim.”
 
For homeowners with a large bond outstanding on the property, however, selling is arguably a better option, he says. “The costs associated with a rental property can swallow a large portion of the rental income, leaving the owner to make up the difference between real rental income and the costs of servicing the bond. And that can be onerous if he still has to pay his own rent - or service a bond on another property - in his new location.
 
“Costs that landlords have to pay include municipal rates, advertising costs to find a suitable tenant, regular maintenance costs, comprehensive insurance and management fees of about 10% of the monthly rental if an agency is appointed to manage the property on their behalf. It is also prudent to take into account unplanned vacancy contingencies and to set aside enough money to cover all costs while finding a new tenant.”
 
However, in instances where the outstanding bond on the property is small, the picture looks very different. “In such cases, owners can confidently expect that rental income will cover the costs and contribute to their own living costs. And they may benefit from capital growth during their absence,” Schultheiss adds.
 
But owners who do decide to rent out their properties are advised to choose managing agents with care. Agents should have a solid track record in property management, says Schultheiss, and should be able to ensure the home is properly maintained in order to protect its value. “They should also be able to advise on realistic rental levels and be able to vet prospective tenants properly  for creditworthiness and reliability.”
 
ISSUED BY HARCOURTS AFRICA


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    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