select
|

Be sure to tick all the boxes when finding an ideal buy-to-let property

As he himself is a landlord and has hands on experience of investing in property for rental purposes, he is, says Tony Clarke, Managing Director of the Rawson Property Group, more and more aware of the mistakes people make in buy-to-let investments.

The first, and possibly most common, of these, he says, is to be negligent about checking out not only the property itself (which is often done fairly thoroughly) but also the neighbourhood in which it is sited.

“It is very important to understand just how strong or weak the demand for property in the area is.  The prospective buyer has to find out what prices have been achieved recently and to try and assess what returns buy-to-let investors are getting.  Wherever possible, the purchase should be in a property where the yield per square metre is significantly above average.  Such properties are usually found in the high density, high demand suburbs which have become the flavour of the month.”

The landlord, says Clarke, must try to assess the ambience of the area in which he is buying because this will be important to the tenants who will want to feel that they are part of the community and are safe there, which requires as much information as possible about the area.  It is necessary, he says, to find out such factors as the average age of the inhabitants, their average incomes (Lightstone can assist in this matter) and what form, if any, the community functions take.  Most importantly, enquiries should be made be on the crime situation in the area.

“The point I am trying to get across, therefore,” says Clarke, “is do not be in a hurry to buy.  Be patient and cautious.”

When it comes to choosing a tenant, says Clarke, a similar need for care is highly advisable – and the use of an experienced estate agent to check out the tenant’s track record on previous rentals, employment history and his credit standing is an essential part of the selection exercise. 

“It is far better to leave the premises unoccupied for a month or two than put in an unreliable tenant, especially in these days when the eviction of some tenants can be costly and time-consuming,” says Clarke.

If, however, a landlord is confident that he has found a good tenant, it will usually pay him to arrange a long term lease in which the rental will be below the going rate in return for the tenant’s commitment.

“One of the advantages of entering a long lease with a reliable tenant installed is that this will make the sale of the unit, should this become desirable, far quicker and easier.”

Finally, says Clarke, do not skimp on maintenance.  Poor maintenance (and too high rentals) are the prime reasons for good tenants leaving.  If properly handled, regular inspections will not be resented by the tenant – and good maintenance will add significantly to the value of the unit.

“Repainting and carpet replacement,” says Clarke, “should be done more often than they are.  Every tenant likes to live in a pristine, well cared for home.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 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.
    • 20 Jun 2018
      The average size of bond granted in SA has grown 7,7% in the past 12 months to R934 000, according to BetterBond, the country’s biggest bond originator.
    • 19 Jun 2018
      In the current market, letting out a property can be a good option as rental demand remains strong, especially in the northern suburbs of Johannesburg. This is according to Chris Renecle, MD of Renprop. However he says that before homeowners let their property out, there are five key points they should make sure are covered before they market the property for rent and sign any lease agreements.
    • 19 Jun 2018
      The Capetonian dream is to live by the ocean with the iconic mountain making an appearance somewhere in the horizon. But, that dream comes with a hefty price tag that many simply cannot afford. But, should you venture some kilometres out of the city centre, entirely new realms of beachside bliss await you …
        
    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