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
    • 23 Feb 2018
      RE/MAX Property Associates’ Table View Office, which services property buyers and sellers along the Table Bay coastline and surrounds, has recently sold a home in Woodbridge Island for R11 million – the highest price paid for any home in the sought-after security complex.
    • 23 Feb 2018
      Choosing to invest in an overseas property can be daunting. But as more and more investors recognise the value of a diversified portfolio that includes property outside of their own country of residence, international property investment is growing in popularity.
    • 23 Feb 2018
      The positive change in South Africa’s political landscape is paving the way for an upswing in the local property market.
    • 22 Feb 2018
      An excellent credit score is one of the most priceless assets a potential home buyer can have. This tool has the power to secure favorable mortgage and refinancing rate, influencing everything from the size of the loan repayment to the interest rate on the home loan.
    • 22 Feb 2018
      What do you do if you love your home’s location and the area, but the home no longer fits your growing family’s needs? Do you stay and renovate your existing home or find a home that meets your developing criteria?
    • 22 Feb 2018
      While every owner wants to sell their property at the best possible price, overpricing a home can be the kiss of death for a sale.
    • 21 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
        
    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