Real Estate Investor Magazine South Africa March/April 2020 | Page 6

Direct your property investment question to [email protected], go to our Facebook page or participate in our regular Facebook LIVE interviews to ask your questions Avoiding vacancies in rental properties Q A O How do I reduce vacancies in my investment properties? CARLO MARIANI The Property Coach ne of Property Investors biggest fears is a va- cant property and rightly so. Vacant properties are a financial and non-financial headache (think about the risk of illegal occupation). There are 2 sets of actions to be taken, one prior to purchasing the property and the other after purchasing the prop- erty. Before you buy an investment property • Become a Rental Market expert. A great “hack” to do this is to pretend to be wanting to rent in the area; visit a few properties, talk to a lot of agent, test how negotiable rental is and estimate how long properties are staying on the market for. • Define your target market. Who will you want to rent to? How sustainable and predictable is this demand for rent? What features do they need? What can they afford to pay? Too often novice investors over-capitalise their properties as a projection of what they like rather than what their tenants want and will pay for. • Run your numbers with a reasonable vacancy ratio. Based on data, not rough assumptions. Don’t assume that just because you have a tenant now you will always have one • Get a copy of the Body Corporate Rules. Does the complex allow for pets and short-term letting? These are two big bonuses. 4 MARCH/APRIL 2020 SA Real Estate Investor Magazine Finding or replacing a tenant • Engage at least 3 qualified and reputable letting agents at the same time. Letting agents do not simply advertise on the most popular websites, but they also have a pool of existing tenants wanting to move as well as a network of prospective renters. Cast your net as wide as possible. • Make it easy for letting agents to do their work. Provide them with quality pictures of your property and grant them easy access to it. Have you clearly communicated to them what type of tenants you will entertain applications from and what type are “no no’s” for you? Don’t waste their time and they will do great for you. • Don’t start high and finish low. Trying to get a rent higher than what your property is worth is a futile attempt; the market is too transparent, savvy and often oversupplied for you to adopt such strategy. Price the property right and if you have not received at least 1 application after ten visits, lower the price immediately. Your overall return will be better over the long-term. If you want to get more practical tips to Fast Track Your Property Success, visit www.thepropertycoach.co.za or email [email protected]