Buy-to-let properties are becoming increasingly popular in South Africa and it’s easy to understand why. These provide the owner with an investment that has long term security: going on current trends the house price is likely to be considerably higher if they choose to sell it in the future, whilst also providing a monthly return in the present day.
Once you’ve decided to be a landlord, however, you have to choose whether to manage the property yourself or take on the services of an estate agent. Here are some of the pitfalls a landlord can face, and the solutions that are available.
1. Reducing Initial Costs
It’s understandable when a person entering the buy-to-let property market for the first time tries to keep costs to a minimum, but sometimes the way to do this isn’t as clear as it appears. Engaging an estate agent to manage your rental property often involves a management fee of around 10%, so it may seem to make sense to avoid this by doing all the work yourself. It’s also important to factor in the time that you’ll spend managing the property; time that could perhaps be spent more productively.
2. Dealing With Tenants
If you’re a people person then you may think that dealing directly with tenants will be one of your favourite aspects of being a landlord, but remember that things often don’t run smoothly. If you manage the property yourself, be prepared to take calls in the middle of the night about things such as burst pipes, and then the pressure’s on you to fix it immediately. You may also have tenants who are in arrears or who disappear without paying. Chasing up the money you’re owed can be difficult for an individual, but estate agents have experience in doing just that and getting results. They can deal with your tenants on your behalf, so you’ll never have to worry about a night time phone call again.
3. Finding The Right Property Managers
You may have read about buy-to-let property managers who take the deposit and run, or who fail to act as expected. You can leave these concerns behind by selecting estate agents who are governed by the Estate Agency Affairs Board; agents who explain exactly what they’ll do for you, and who will show you exactly where the tenant’s deposit has been invested. In this way, you can form a secure relationship with your estate agent that saves you money and is of benefit to your tenants as well.