If the experts are to be believed, tenants are going to have to start choosing on which side of the fence they think the grass is greener - adhering to the terms and conditions of their lease agreements, or taking liberties. Otherwise, they could not only find themselves out on the street, but may also have difficulty finding another suitable property to rent.
South Africa has a number of laws that protect tenants and unfortunately there are those who exploit this. The days of landlords simply changing the locks, shutting off the electricity or just entering the property and putting the tenant's belongings out on the pavement are in the past. The landlord of today has to be extremely careful to whom he rents his property, given that bad tenants can end up costing a fortune in legal fees and lost rent.
Don’t default
While the laws haven't changed, the property climate has and the number of people buying investment properties has dropped significantly over the last couple of years. Rental properties are becoming a little thinner on the ground and landlords are now able to not only pick and choose to whom they rent, they are more likely to evict a defaulting tenant or one who fails to take care of the home, secure in the knowledge that the property will in all likelihood be snapped up by someone new.
According to Jan Davel, MD of the RealNet group, the other aspect set to affect the number of rental properties available is the growing number of buyers who are re-entering the property market. "Many homeowners who were virtually forced into becoming landlords when they could not sell their properties during the recession are now able to find buyers, so that stock is leaving the market,” he says.
Getting greedy
So does this mean that landlords have carte blanche when it comes to increasing the rent? Although the average cost of renting a home has increased quite dramatically over the past year, this doesn't mean that landlords can get carried away,” says Davel. “They need to bear in mind that their tenants are also probably struggling to keep up with regular increases in the cost of electricity, food and transport, not to mention higher health and education costs, and that it is worth moderating their rental increases somewhat if they would like to hold on to a good tenant who pays on time and looks after the property.”
It pays to remember that a good tenant is worth his weight in gold and any landlord who has found a tenant who looks after the property, keeps the garden neat and tidy and pays their rent on time all the time, should respect that. Losing a tenant because of a high rental increase could well end up costing the landlord a lot more if the wrong sort of tenant subsequently moves in.
While many South Africans are still struggling with debt and as such may not be in a position to invest in their own homes, many first time buyers, particularly among the younger generation, are finding that the monthly home loan repayments they would be required to make are lower than the rentals being charged for similar properties.
Interesting …
Berry Everitt, MD of the Chas Everitt International property group, says that the strongest motivation for such buyers at the moment is obviously the low mortgage interest rate being offered by banks – notwithstanding the recent 0.5 percent rate increase – which makes it easier to qualify for bonds at an earlier age, and of course, also means lower monthly bond repayments.
He adds that there has been a global shift in how youngsters plan their lives and that young working people are increasingly attracted to home ownership rather than renting – and in fact are often skipping the rental step altogether by staying on in their parent’s homes until they have saved up enough for a deposit on a home of their own.
