Real Estate Investor Magazine South Africa Real Estate Investor Magazine March 2018 | Page 29
INVESTMENT SERIES
more effort on a day-to-day basis. Depending on where your
property is located, short term rentals can be more profitable
over high seasons, but keep in mind that you’ll need to find
tenants for quiet periods during the year.
2. Who’s managing the property
When renting out your property, it’s important to have a clear
plan regarding property management. You can choose to enlist
the services of an agency for this, or you can choose to do
it yourself. While it may save you money in the short run to
manage your own rental property, it’s important to be realis-
tic about the day-to-day requirements. For this reason, many
first time landlords opt to outsource property management
services. Property management includes everything from col-
lecting rent, to inspections and repairs. If you choose to do
this by yourself, it’s important to stay organised and have open
channels of communication with your tenant.
3. Legal matters
Lease agreements need to be clear and detailed. You don’t want
to end up in a situation where you and your tenants argue over
things like deposits or repairs. Essential items to include in
your rental agreement include what is or isn't acceptable from
HOW TO RUN A SUCCESSFUL RENTAL
Check comparable rentals in the area and price
yours at or just under the market.
Only price higher if your property has features that
would make it more attractive to prospective tenants
Time of year has a big impact on price.
Depending on when you list your proeprty, your
tenant pool could be significantly smaller. Take this
into account in your planning and listing of your
property
Know the market (or work with someone who
does).
Don’t miss the peak of your city’s rental market by
overpricing your rental property – you’ll end up drop-
ping the rent in the long run and oftentimes you’ll end
up with below market rent.
Conduct thorough background checks.
The types of items you can find in a background check
are evictions, criminal records, previous property
damage, tax liens or a trail of unpaid bills.
You need to understand that credit score, above
all else, is your most important criteria for vetting
tenants.
Even if they’re underemployed or a new hire, someone
with great history will find a way to pay the rent on
time.
Try to divorce emotions entirely when choosing
tenants.
While you may feel better offering your rental to
someone down on their luck, at the end of the day
you need to remember that you’re running a business.
Focus on how a prospective communicates with
you throughout the application process.
This will tell you a ton about what kind of communica-
tion they will have with you as a tenant.
the tenant, breakage costs, and method and date of payment.
It’s a good idea to stay up to date on the law when it comes
to evictions - gather all the necessary information from legal
experts before you rent out your property.
4. Make money
Ensure you have enough income from your property to cover
your costs. It’s important not to over-capitalise on your rental
property, thus pricing yourself out of the market. Stay up to
date on rental prices in the area for comparable properties to
ensure you’re able to find a suitable tenant. Marketing your
property is also an essential step. The days of placing a small ad
in the paper are long gone. Whether you choose to advertise
with an agency or by yourself, make sure you have high quality
photos and include all the necessary information in your ad-
vertisement. Social media has become a popular way to market
properties, so look out for any groups focusing on rentals in
your area.
SOURCE
Rentberry
Landlord-tenant law:
Remember that in most places, the tenant has more
rights than the landlord, so don’t let someone move
into your home before they’ve paid their security
deposit and/or first/last month’s rent. Once a tenant
moves in, the law views them as having the upper
hand.
Take move-in pictures and use a detailed move-in
checklist.
This comes in extremely handy if there are items that
need to be paid for from the deposit funds.
Inspect the apartment when a tenant moves out
before another moves in.
Have tenants fill out an “Apartment Condition Form”
stating any issues with the apartment or agreeing
that the apartment was delivered with no repairs
needed. If a tenant disputes any deductions from their
security deposit you’ll want as much documentation
as possible.
Tenant relations:
How quickly are you able to connect with a tenant?
Do you have all your leasing and property documents
ready ahead of time? How well do you serve your
tenants’ needs during their stay? How well do you
close your relationship with the tenant through the
departure process? If you do all these things right, you
will be well on your way to a strong reputation and
repeat business.
Remember that real estate success is not luck
Real estate, like any investment market, consists of
patterns that repeat themselves or cycles. When
evaluating any real estate investment you will need
to think about and calculate your property cash flow,
you will need to know how you are going to leverage
your investment capital, understand what your equity
is, figure out what your potential appreciation is and,
most importantly, do some risk assessment.
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