There are a growing number of property owners who prefer to let their properties by themselves instead of having an agent; however the available tools make it challenging to look for a good tenant between all the faceless strangers on the web, according to the co-founder of the property company Ekaya.com, Ruarka Ferreira.
“Dealing with property and occupant relationship can be demanding and a lengthy process,” he shared to Fin24.
Ekaya has been trying and developing its services in Cape Town and encloses up to now, yet has been searching at the national stage since the first day.
“Numerous individuals are now renting compared to before plus, they’re renting long-term. Ever since 2008, this trend has really stepped up as fewer people can pay to purchase property or take more time to get home ownership at least,” Ferreira said.
“This fundamental trend has made the market of a property order with demand far exceeding production, making things very aggressive among tenants.”
Most of the properties that Ekaya works with are present on the market not more than 10 days (from the moment of listing to lease signing) plus the site experiences great interest from future tenants, usually 20 final applications for each property.
“We recognize the trend of the growing number of property owners opting to deal with their rentals by themselves against hiring an agent. It is greatly rooted in the fact that succumbs are strict on rental properties (6-8%) and the rental agents usually have 10% commission charge,” stressed by Ferreira.
Recently about 70% of the market prefer the DIY (Do-It-Yourself) model so to make the most of their incomes, however this comes with its own disadvantages, he notified.
The largest challenge that property owners will face is the tenant risk.
“Placing the wrong individual in your property can have severe connotations for your investment. One month of unsettle payment by a tenant can wear down your whole yield for the year and it can be hard, undesirable and usually a very costly process to get rid of bad tenant,” he said.
“Before, security deposits might have aided to alleviate some risks, yet the truth is the protection they give is insignificant. Current changes to the policy and law have made properly administering deposit of the tenants on a heavy affair and after the deposit is reduced, the property owner remains stuck in unlucky situations without any influence and asset that don’t produce any return at all.”
The best for property owner to do is to be litigious as the betting process is going on.
“Since the demand is very high, you will have a great interest for your property but the ploy is to score through the noise for you to get what’s right for you. Candidates who have a solid payment record and trusted references are good start however property owners must attempt and look at the entire picture and come up with an informed decision through utilizing the information and tools available,” he shared.
“You can make all by yourself, you must be wise about it.”
In his vision it is still a wonder to me to buy-to-let-investors.
“With such great demand, the rental prices increase by 10% on a yearly basis, which dramatically lessens the time it takes for rental return to go beyond the mortgage repayments transforming the property to an income-producing asset,” Ferreira clarified.
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