New Property buying trend: SA's savvy 'rentvestors'
South Africa is currently seeing the emergence of a new type of property buyer known as a 'rentvestor'.
"Quite simply, these are people who may not be able to afford to buy in the areas where they live and work, but are so determined to become property owners anyway that they are seeking out less expensive areas with a promising future and buying homes there that they may then let to others", says Gerhard Kotze, MD of the RealNet estate agency group.
"In other words, they are often becoming landlords themselves while remaining tenants -which is a new take on the buy-to-let model where one generally finds that the investors own their primary residences."
Industrial property sector delivers best investment returns
According to the latest MSCI's IPD South African Bi-annual Property Index, industrial property was the top performing sector in the country with a total return of 7.0% for the first six months of 2017. Despite tough economic conditions, this outperformance was driven mainly by a lower vacancy rate exhibited across the South African industrial property sector.
Greg Nafte, co-director of Nexus Property Group (NPG), says that in terms of property investment return potential in South Africa, "The top performing segments for the first half of this year were both from the industrial sector - namely warehousing and light manufacturing, which produced total returns of 7.2% and 7.0% respectively. These good returns, in contrast to an otherwise low-growth economy, are expected to remain robust."
What to expect for Gauteng's property market in 2018
According to Jacques du Toit, property analyst at Absa Home Loans, it is not just doom and gloom awaiting South Africa's property market in 2018.
Du Toit, who recently shared his forecast at a Seeff regional meeting in Pretoria, says stable interest rates, inflation to remain under control, steadily rising house price growth, a gradual improvement in consumer finances with debt ratios edging lower and higher growth in disposable incomes, are all part of his predictions for the coming year.
Using a rental agent vs. letting your property privately
Many first-time buy-to-let invstors spend a good deal of time considering whether a rental agent is the best option for managing their property, or if they could successfully handle the letting of their investment on their own.
While there are pros and cons to both options, Jacqui Savage, National Business Development Manager for Rawson Rentals, says the benefits of using an experienced and trustworthy rental agent for the majority of landlords, far outweigh the self-managed alternative.
When does the Consumer Protection Act apply to property sales?
The wave of publicity that accompanied South Africa's widely praised Consumer Protection Act has in some cases led buyers (consumers) to believe that they are afforded a blanket protection covering every commercial transaction in which they are involved.
Rowan Alexander, Director of Alexander Swart Property says, however, that in property dealings most transactions do not fall under the Consumer Protection Act.
One such is the sale of a residential property by its owner by means of a private treaty, i.e. with a standard Deed of Sale. In these cases, Alexander says the agreement is not covered by the Consumer Protection Act because the seller is classified as a 'supplier'.