Property 24/10 - 161

Property rentals and stock shortages
Estate agents surveyed by the Tenant Profile Network, (TPN) recently revealed that the residential property market faces good quality rental stock shortages with 94 percent of respondents indicating a shortage of rental properties. The report further reveals that 38 percent of tenants are renting property for the first time, 35 percent were downscaling while 27 percent moved to upscale.

Michelle Dickens, TPN managing director explains that according to Census 2011, 3.5 million households or 25 percent of the population live in rented accommodation – an increase from 18 percent in the previous (2001) census.

“Tenants are also staying in rented accommodation for longer, as previously tenants’ age spiked at 27 years, after which they began exiting the rental market,” notes Dickens.

She says currently, the spike has moved to age 31, indicating that tenants are finding the home ownership market more difficult to enter – and points to an ever increasing number of tenants having to find accommodation in a stagnant property stock pool.

Can I subdivide and what will it cost?
A Property24 reader asks:

I own a block of flats in the Alberton North area. The building consists of 8 flats and a house which is adjacent to the flats that are rented as a business premises. I would like to sell the property and have considered the possibility of either:

a) Subdividing the flats and selling them off individually or,
b) Subdividing the house from the block of flats and selling them off separately.

I have been told that it would yield a better return this way, however, I am concerned about the costs and time frame as I don't have the extra money as capital.

Can you give me some guidance and costings etc. and what would be the best way to do this?

Andrew CB Smith, a Director of DenoonSampson Ndlovu Inc. Conveyancing Attorneys, advises:

The first consideration you will need to give some thought to is the marketability of the different options.

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