Real Estate Investor Magazine South Africa Real Estate Investor Magazine March 2018 | Page 28

GETTING STARTED 5 First Time Investor Guide PART LANDLORD BASICS BY MONIQUE DU TOIT B uy-to-let investing has been gaining traction, with more investors noticing the advantages to owning a property to rent out in a competitive market. But without proper planning, the dream can quickly turn into a nightmare. 1. Long or short One of the first questions you need to answer, is whether you’re looking to rent out your property on a short-term or long-term basis. Both have clear advantages and disadvantages, with your ultimate decision dependent on the specific property and cir- cumstances. Long term rentals have the advantage of stability. Your tenant is generally signing a longer lease, meaning you’re guaranteed a monthly income for the duration of the contract. 26 MARCH 2018 SA Real Estate Investor Magazine This also allows you to factor in monthly costs like water and electricity. Another clear advantage of a long term rental is that, typically, tenants do not need it to be furnished. This saves you some initial expenses, but it’s important to keep in mind that you’ll have to maintain the property. This usually involves painting and cleaning once a current tenant moves out. Short term rentals have become all the rage in cities like Cape Town, where platforms like Airbnb have taken the mar- ket by storm. An increasing number of landlords are choos- ing to let their properties to short term tenants (usually on a day-to-day basis), rather than getting stuck with one long term tenant. While this has the benefit of added flexibility, it’s important to keep in mind that short term rentals require