Appeal to broaden letting industry’s referral network

News > news - 31 Aug 2007
JOHANNESBURG (August 29) – Already an established practice among residential property sales companies, the call is rising for the property letting industry to broaden its horizons by bringing on-stream a referral network that maximises the opportunity for swiftly locating tenants.

The estate agents referral system means one agency receives the mandate to sell a property and via computer software, shares that information among the referral network to maximise the sale potential. Regardless of which agency concludes the sale, the original agency receives a proportion of the commission, while the client has secured the broadest exposure for their asset and swiftly concluded the transaction.

Andrew Schaefer, MD of Trafalgar, the residential letting and property management group, says by applying the same principle within the letting industry, clients can maximise the potential for swiftly renting out their investments. The initial agency still benefits from the mandate by securing commission, but will also be growing the business via referrals and transactions concluded via the network.

He believes the system also broadens the scope for companies not currently involved in letting to branch into the industry and thus play a role in enabling the concept to achieve critical mass.

Schaefer’s comments come as South Africa faces a burgeoning demand for rental stock. The country’s insatiable demand for affordable housing is sustaining a buoyant buy-to-let market where shrewd purchasing potentially yields high investment returns. Research shows that the bulk of buy-to-let investors are acquiring properties in new developments being sold off-plan, specifically those accommodating the middle-income market requiring properties below the R1m mark.

These properties are attracting young upwardly-mobile singles and couples whose lifestyles are geared for swift relocation without being tied to bond repayments and thus substantially growing the demand for access to rental accommodation.

Via a national branch network, Trafalgar lets and brokers residential and commercial properties as well as manages bodies corporate, Home Owners’ Associations and commercial and industrial properties.

The current portfolio covers 50 000 residential units in 1 200 buildings and more than 1-million sqm of commercial and industrial premises in the country’s major metropolitan areas.

Schaefer says in this context broadening the referral network accommodates this growth in the market and enables buy-to-let investors maximise their returns by not having properties standing vacant unnecessarily.
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