An overwhelming number of property owners have sold their properties in order to rent as a result of the challenging economic climate. It is therefore not surprising that the rental market is booming, and for many individuals, it is their belief that the cost of living will be the primary reason that will impact adversely on the housing industry. Buying vs renting a home in the present economic climate might seem to be a rather attractive option, especially in view of the fact that it is becoming increasingly more difficult to secure home loans.
It appears as though the rental market will continue to expand with 82% of respondents in a recent survey being of the belief that rental properties just do not meet the current demands which is very good news for landlords and rental agents or for those thinking of entering the rental industry. Obviously while the rental market is booming, it has to face up to the various challenges. It is also believed that electricity price hikes, inflation, retrenchment, rates and taxes and market evaluation will all have an influence on the overall property market.
In the midst of the demand for residential rental space there are without question many challenges that landlords and rental agents face when it comes to the management of rental properties:
- The most frequently occurring challenge is the damage to rental property – this is in the region of 65%.
- Tenants absconding – about 43% of tenants.
- Evictions – 43%.
- Deposit issues – 38%.
- Legal costs – 18%.
It is particularly interesting to note that while the industry is booming and there is plenty of room for development the key portion of agents’ time is taken up by administration leaving them little if no time to focus on the growth of their property portfolio in order to market their businesses or to offer improved service for their existing clients.
If the current economic climate teaches us anything it is about the significance of handling our assets and investments well. There is little uncertainty that the potential exists for South Africans to capitalise on the current and impending growth in the property market.