Well-priced rentals move quickly

This is according to Shaun Groves, Pam Golding Properties (PGP) rental manager, Johannesburg northern suburbs, who says in some areas there is such a strong demand for properties that there is often a shortage of good stock.

“Where properties are correctly priced, landlords generally have little trouble in renting them out,” says Groves. “However, there are some owners who are receiving poor guidance from their agents and are overpricing their properties and as a result, these properties do not rent out as well as they could. In such cases our agents have to undertake some price counselling with the property owner to ensure that a realistic, market-related rental is set and achieved.

“Three to four months ago areas such as Bryanston were performing well from a letting perspective,” he continues. “Now Bryanston is experiencing a drop-off because many of the landlords in the area have become unrealistic in terms of their rental income expectations. With excessive rentals being asked tenants would rather find a property in Hyde Park, Sandhurst or Morningside.”

Groves observes that Hyde Park and Sandhurst have in turn enjoyed growth in demand in recent months and these two areas are now once again in high demand. Some other top performing areas in terms of rentals include Parktown North, Parktown, Dunkeld, Westcliff, Morningside, Sandown and Hurlingham.

Groves points out that during the second half of 2011, PGP’s Gauteng rentals division has performed exceptionally well, with the months of July and August being record months. “While September was not as active, October proved to be another highly successful month,” he says.

Asked whether the demand for rentals was being driven by difficulties in accessing credit, Groves says he believes this is not such an important factor in the rental market in the northern suburbs. “Many tenants are professionals, corporations and expats seeking fairly short-term accommodation ranging from anything between six months and three years.

“We see a trend towards foreign corporates and local professionals creating a demand for accommodation closer to the Sandton CBD,” he says. “Apartments are popular in some of these areas while more affluent professionals are looking at homes in established areas such as Westcliff, Parkhurst and Parktown.

“Homes in Parkhurst and Parktown North are in tremendous demand and we have a shortage of properties for rental in these areas,” he points out. “Professionals and executives enjoy the cosmopolitan lifestyle while the smaller stands in these areas give an added sense of security and convenience.”

“The prices of rental units depend very much upon the area in question. It should be kept in mind that foreign companies do have limits to their budgets and are price sensitive. Rentals should therefore remain competitive and realistic. There does seem to be an increased demand for everything to be included in the rental such as furniture, servicing, security and so on. Corporates want to be able to offer their employees an all-inclusive package.”

Groves advises tenants to maintain a good credit record because PGP looks at this closely before renting out a property. The agency also checks credit scores with the applicant’s bank in order to ensure creditworthiness. Previous landlords are also contacted for references. If any problems such as rent default come to light these are reported to the landlord. “We consider such checks vital in protecting our clients,” notes Groves.

“Our agents have years of experience in the rental field and are known for their professional advice,” he concludes. “We believe that it is in everyone’s best interests for properties in the rental market to move rather than remaining unoccupied for long periods of time. In today’s challenging economic climate it is important that assets deliver a sound return.”

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