Cheaper homes rented out quickly
Rental properties priced for less than R5 000 per month are said to be popular in some Western Cape areas with tenants paying rent on time.
RE/MAX predicts to see a marked increase in the rental market activity in the next few months especially in the less than R5 000 per month price bracket in areas including Grassy Park, Strandfontein, Mitchells Plain, Lotus River, Ottery and Lansdowne.
Mark Brickles, broker/owner of RE/MAX Ultra Select says if the interest rate does increase and the market sees a double dip as predicted, many people will not afford to buy and will rent instead.
He says that an increase in interest rate will mean an increase in bond finance costs for landlords. This combined with the increased costs of municipal services and demand for rentals will push rental prices up as well.
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Why is your property not selling?
So your house has been sitting on the market for longer than you would have liked. Now what?
One reason homes stay on the market longer is because of incorrect pricing. Get an online property valuation with sold prices of other similar properties in your neighbourhood, which will help you set a market related price.
Adrian Goslett, CEO of RE/MAX of Southern Africa says that while selling a home in the current economic climate may not be as smooth sailing as in the past, he says that if the correct factors are in play, it should also not be too difficult.
According to Goslett, there are usually three key reasons why a home may not be selling, but these situations are relatively easy to adjust and fix. They are:
1. Price
Goslett says that this is one of the most common reasons why homes don’t sell. While there might be a buyer for every home, it’s the buyers, not the sellers, who ultimately determine the market value of a home. “In the current market,” says Goslett, “over pricing has led to many properties being on the market much longer than they should be, and the longer a property is on the market, the less likely it is that the seller will get their initial asking price. On average sellers can expect their homes to spend between 30 and 60 days on the market, if it is correctly priced.”
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Top six tips for buying property
The current slowdown in South Africa’s residential property price growth provides potential home buyers with the ideal opportunity to get a foot on the property ladder.
Buyers can gauge how fair an asking price is by consulting an estate agent or by purchasing a property valuation report.
However, in order to take full advantage of this opportunity, consumers need to empower themselves with information to guide them on how to make the best possible investment decision.
According to Jenny Rushin, Provincial Sales Manager at bond originator ooba, as the economy recovers, property prices remain reasonable and the effect of lower interest rates is felt, confidence will return to bricks and mortar investments. She says that even though buying a home is fundamental to wealth creation, it is one of the biggest purchases most people are likely to make and they should be well informed when making this decision.
Rushin offers the following useful tips to help consumers navigate the property market effectively:
1. Location, location, location
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Throwing your tenant out – literally!
A Property24 reader says:
I got so fed up with my tenant for not paying his rental for the last 2 months that I entered the premises with my locksmith and changed all the locks. My tenant is due back from work in 2 hours time and under no circumstances whatsoever will I reopen the premises for him!
Alan Levy, an attorney at Alan Levy Attorneys who specialises in evictions, rent recoupment and landlord / tenant law replies:
In this case the landlord should have contacted his attorney for advice before even contemplating steps such as those that were taken.
The procedure that should have been followed is outlined in the Prevention of Illegal Eviction and Occupation of Land Act 19 of 1998 (“the PIE Act”) as interpreted by our courts. This procedure all going well is as follows:
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Buying into a ‘life right’ scheme
If you’re at a stage in life when you are weighing up your own retirement options or those of a relative, you may be considering buying into a ‘life right’ scheme to secure your future or theirs, in an environment where appropriate care is provided.
The benefits of entering into a life right scheme are that there are no transfer duties or registration fees payable.
So says Alwina Muggeridge, Pam Golding Properties area principal in the Kloof and Hillcrest areas of KwaZulu-Natal who adds that when entering into life right schemes it is critical to understand that despite the reference to the ‘buying’ and ‘selling’ of a unit, there is no purchase of actual real estate, but rather a purchase of the right to live in a specific unit.
“The ownership of the unit is retained by the development and is not transferred to the individual as with sectional title.
“It is important to understand that the property itself does not become an asset in the purchaser’s estate and therefore cannot be bequeathed to an heir in their will,” says Muggeridge.
She says in a life right scheme, the basic concept is that an individual purchases the right to live in that unit for the remainder of his or her life, possibly along with a spouse. The sum of money paid in such purchases is a market-related and pre-determined amount. That purchase price is often viewed as a lifetime rental paid in advance.
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Buying property: offer to purchase
You have done your research and checked your credit rating, gone house hunting and found the home of your dreams – now what? It is time to fill out the paperwork and make an Offer to Purchase. For many home buyers this may be a daunting task and the ins and outs of making an offer could be vague.
Adrian Goslett, CEO of RE/MAX of Southern Africa says, fundamentally, an Offer to Purchase is an agreement that contains the terms and conditions of the property transaction. “The terms and conditions must be agreed upon by the buyer and seller of the property on a number of issues before the document is signed. Everything that is agreed upon by both parties must be listed in the Offer to Purchase document.”
Goslett says the Offer to Purchase must contain in writing all the terms on which the parties have agreed. This should cover things such as the date of occupation, occupational rent, fixtures and fittings and the conditions of sale. Once the Offer to Purchase has been concluded and signed by both parties it will become the Deed of Sale on that property.
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Can I shut off a tenant’s electricity?
A Property24 reader asks:
I own and let a duplex on the North Coast. My tenants gave me notice on 1 August.They are moving out on 30 September but they asked if they could use their damages deposit as the last month’s rental.
I told them that our signed lease agreement did not permit that and I was sticking to my guns. Their rental used to come through like clockwork on the first of every month via debit order, and I can accurately presume that I won't be getting this month's rental as I would have normally had it by now.
They are only allowing letting agents with potential clients through on a Friday between 1-1.30pm and nothing else allweek. My pool water has gone from sparkly blue to dark green; the grass is knee high; the carpets are filthy from their two dogs and need shampooing; they have put wallpaper onto the one bedroom wall, which needs to be removed; they won't let me send a plumber in to attend to a major shower leak and the adjacent bedroom cupboards are damp and musty.
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