SA’s Rental Market Is On The Rise – Here Is How To Get Involved

South Africa is in an interesting place right now for property investors. With the economy under stress and banks tightening their lending criteria, more and more people are choosing to rent rather than buy a home. And, combined with a flat housing market, this offers huge potential for investors who want to build their portfolio by entering the rental property market. Here is how to make the most of this fantastic opportunity:

• Look At Your Own Property:

Living in a home that is too big for you? Or is your property on a large but unused stand? Entering the rental market by dividing your current home, building a flatlet or moving into a smaller home and renting out your current home are simple ways to make your property work for you. While some of these options can require capital input, the returns can be very rewarding. Take some time to do the math and research, and do not forget to strike a balance between creating a quality rental home and the rental income you will earn as a result.

• Investigate Small Housing Options:

This is all about knowing what is in demand in your area. In Johannesburg, it may be difficult to rent out a large family home – but a flat, apartment or small complex will always be in demand in the market. Remember, more people are looking for affordable rental homes than luxury accommodation. Also, look into up-and-coming neighbourhoods – it is easier to find a bargain here!

• Do Not Buy On An Impulse:

Remember, you are not looking for your dream home – you are looking for an investment. Do not act on impulse when buying a property that you will rent out. Instead, take the time to research properties, the neighbourhoods, schools and transport links in the area to see if it will appeal to your rental market. Know exactly what your budget is. In addition, determine exactly what the potential rental income you can make on a property in that range is. Make competitive offers of around 20% below the asking price and do not be caught up in the emotions of making a purchase.

Jason Scholtz is the CEO at Envision Investments and a leader in the property and strategic investments industry in South Africa. For more investor tips and an insider’s look into the South African market, be sure to get in touch with him, keep an eye on his blog or visit http://www.envisioninvestments.co.za/