ASK THE EXPERTS
Invest now in residential or wait for the market to improve ?
CARLO MARIANI The Property Coach
I
am the current owner of one buy-to-let residential property in Johannesburg . I am struggling to get my rent paid in on time on this property and is always a struggle . I still desperately want to grow my property portfolio but I am just wondering if now is a good time to buy given my experiences on the rental side and the market seems to be in the doldrums because of load shedding , poor municipal services , etc . What would you recommend that I invest now or wait until the market improves ?
There are two separate issues in this one question . Firstly , getting rent paid in full , on-time , allthe-time is core to the success of any property investor . I ’ m sorry to hear you ’ re struggling . Here are some practical solutions :
1 . Make your tenant selection process more robust , using credit checks and landlord references as non-negotiable
2 . Be prepared to say no to substandard applicants , even it feels painful in the short-term
3 . Ensure you use a professional lease agreement . My first tenant was a nightmare and it was entirely my fault . I learnt the hard lessons , didn ’ t give up and never looked back .
Secondly , waiting is rarely a winning strategy , unless you ’ re convinced that the residential property market in SA is about to crash . This is unlikely , considering the robustness of the underlying demand and demographics drivers and the not overly aggressive property lending by the main financial institutions , as regulated by the National Credit Act . This does not mean buying any property , in any area , at any price and just waiting ... that might be a losing strategy . Develop area expertise , operate with strategic focus , grow your knowledge and collaboration platform . Then take patient action , not desperate action .
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12 FEB 2023 SA Real Estate Investor Magazine