select
|

Property investors benefit from changing lifestyles

Most people buying residential property these days are not only thinking about having a pleasant, convenient place to live, but also about building wealth and getting ahead in life.
 
However, says Jan Davel, MD of the RealNet estate agency group, the most likely way to build real estate wealth is by “holding” property for long periods of time – preferably 10 years or more – and that simply does not coincide now with the lifestyles of many young people.
 
“Gone are the days of the mid-20s marriage followed quickly by two or more children and a second or even third property purchased by the time people were in their late-30s.” he says.
 
“Young people now tend to move around much more in their 20s than their parents did, often to better their careers before they settle down, and many also carry heavy student debts. Others just don’t want the responsibility and expense of homeownership, including upkeep and additional payments such as levies, rates and taxes or insurance.”
 
Indeed, he notes, the latest statistics from the mortgage originators show that the average age of first-time buyers is now between 35 and 36, and First National Bank recently noted in its Property Barometer that the “oldies” who are selling and downscaling to smaller properties are key drivers of market activity at the moment.
 
All of which, says Davel, is good news for the buy-to-let property investor. “Young people are staying in the rental property pool for eight to 10 years longer than they used to, and with the backlog in home building over the past few years, and demand continuing to rise as more people enter that pool, there is already a shortage of rental units in many areas.
 
“This of course means that both rentals and the capital value of rental properties are rising– and that is no doubt why we have seen buy-to-let purchasing start to rise again, from 3,5% of all property sales in 2012, to around 8% this year.”
 
However, he cautions, it is becoming increasingly important for such investors to ensure that their assets are managed by agents who are properly qualified to do so.
 
“Landlords who decide to self-manage and save a rental agent’s monthly management fee often end up losing a great deal more than that because they were not able to vet a new tenant properly and get the correct credit information, or because they did not ask for a big enough deposit, or because they receive no rental income for several months while going through the legal process of evicting a defaulting tenant.
 
“But the biggest hurdle for landlords managing their own properties is usually compliance with the increasing amount of complicated legislation regulating the relationship between landlords and tenants. A good managing agent will help them to understand all of this and ensure that they stay on the right side of the law.”



  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Jun 2018
      The rental market in many Johannesburg suburbs has shown encouraging signs of revival this year but it remains a competitive market and landlords who best cater to their market’s needs will reap the healthiest returns.
    • 22 Jun 2018
      Home design is constantly evolving to reflect the changing needs of society. We look at some of the ways in which our use of space is changing.
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
        
    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