Category Archives: Advice renting

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Property Buyer Show 2018 Cape Town | The Rent2Buy concept

Category : Advice renting

Private Property chats to Meyer de Waal, the founder of Rent2Buy, a new home ownership concept that seeks to provide ordinary South Africans with the opportunity of owning their own home.

Marc:

So I’m here with Meyer de Waal from Meyer de Waal and Corporate attorney’s. And also obviously Rent2Buy. Really curious to find out what that means , because I understand what renting is, I understand what buying is, but what is Rent2Buy?

Meyer:

Rent2buy is a unique concept. We started rent2buy, being a property attorney, 11 years ago. And last year, a group fund came to me and said they’re going to change my life. And I asked them, “How are you going to do that? Are you going to give me a lot of stock, because I’m always looking for rent to buy stock.” And they said, “Well, we’ve got lots of money for you.” So I said, “Well, when money talks, we listen.” So what we’ve put together is a rent to buy concept where the price ranges are from 400,000 rand to 1.8. We started with a pilot project in the price range 400 to 1.8, and in Capetown Metropole to Gauteng.

So the moment we can prequalify a home buyer, we issue them with a certificate. And that certificate is as good as a cash buyer. The buyer has to put down a 7% deposit. If he buys from an investor, that has to be a three to five percent deposit. We then take transfer of the property. We keep the property for a period of two years. During that time, we bring in all our goodies like Home Owners Education, debt repay budgeting tools. And in month 22, we have a look at the customer’s profile. Did he pay his rent every month on time? Were he up-to-date? Did his credit record improve?

Marc:

So wait I am confused… what happens after the 2 year period??

Meyer:

At the end of a 22-month period, we can convert that rental into three opportunities. The first opportunity is, we can do an installment sale for you. And you pay back that rental amount. The purchase price, you pay that back to us over a period of 20 years. We freeze the price for you from day one. And the second opportunity is where we can apply for a home loan. Maybe you want to do a little bit of a less monthly installment. The bank will maybe give you a prime, maybe prime less a half. And with that you can actually take transfer and become the home owner. The last opportunity, maybe you want to move on with your life. And you say to me, “Meyer, I actually want to move out to a different property.” Then we can assist you to actually market the property, put it on the market, and if you find a buyer that is going to pay you a higher price, we can then assist you to take transfer, sell the property, and put the profit of the money into your pocket.

Source:PrivateProperty 


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5 investor must-knows for renting out property

Category : Advice renting

In the current market, letting out a property can be a good option as rental demand remains strong, especially in the northern suburbs of Johannesburg.
The profitability of a rental property often depends largely on if there is a bond over the property and the levies/fees that need to be paid by the landlord.
This is according to Chris Renecle, MD of Renprop. However, he says there are five key points landlords should make sure are covered before marketing the property for rent and signing any lease agreements. These are:

1. Make sure your property is letteable

Before letting out a property, homeowners need to ensure that it is in good working order and that it will be appealing to prospective tenants.

“Think about the kind of tenant that would find your property suitable and what kind of tenant you want to attract. Focus on the features that would be important to them, like the garden or security systems, and make sure these are in top shape. Take care of the general things too, like ensuring the plumbing and electricity points all work. Things like leaky roofs, built-in appliances and cupboard doors should also be in good working order,” says Renecle.

2. Establish a good working relationship with a rental agent

There are unfortunately many unethical people who take advantage of landlords and loopholes in lease agreements. Renecle says the best way to avoid this is to contract the services of a reputable rental agent to help you through the process.

“A reputable agent will thoroughly scrutinise any prospective tenants’ applications, ensure that their credit record is in good standing and that their documentation is legitimate,” he explains. “These are things that a landlord is often unable to do when going it alone as they don’t have access to the systems and information that property companies do. Added to this, an agent can assist in collecting the monthly rental amount as well as assisting and or guiding the landlord in taking the necessary legal steps should payment not be forthcoming.”

3. Ensure you have a solid lease agreement

Without a solid lease agreement that clearly stipulates the responsibilities of both the tenant and the landlord, as well as clearly outlining the terms and conditions of the rental, the landlord is leaving himself or herself open to exploitation. A reputable rental agent will be able to provide a solid lease agreement that adequately protects both the tenant and the landlord.

“This is one of the most important aspects that a landlord must ensure is done properly. Free templates off the internet often do not legally cover all the potential areas that unscrupulous tenants can take advantage of,” says Renecle.

4. Budget and plan well so that maintenance and financial shortfalls are covered

Often renting out a property isn’t as simple as the money coming in covering the money that needs to be paid out. The profitability of a rental property also often depends largely on if there is a bond over the property and the levies/fees that need to be paid by the landlord.

Renecle explains that while electricity and water usage are covered by the tenant, as should be stated in the lease agreement, costs such as bond repayments, levies and rates are for the landlord’s account. Special levies, if implemented by a sectional title complex, are also not passed on to the tenant. This means that a landlord has to carefully work out if there will be a shortfall that he or she needs to cover between the rental being charged and costs that need to be covered. There are also other costs that landlords need to budget for around maintenance and repairs that may be required from time to time.

5. Ensure that your tax and accounting is taken care of

As a rental property is an investment, it needs to be declared as income on your annual tax return. Certain expenses from running your rental property can also be deducted off the income. There are also other tax implications to owning a rental property such as Capital Gains Tax, which is due should you decide to sell your property.

Renecle advises landlords to employ the services of experts to help them property manage the tax and accounting side of owning and operating a rental property or properties.

Source : Property24