What to Know Before Renting Out Your House
With rent prices increasing steadily in recent years, renting out a property can be a good way to supplement your monthly income. The average rent in the Western Cape increased from R8 777 in 2017 to R9 124 in 2018. It’s not isolated in the Western Cape as other areas in South Africa increased their average monthly rent over the years. If you’re planning to rent out your property, there are some things you need to understand.
Understanding the Risks and Benefits
Many people are turning to rent out their property because of the extra inflow of money, which they can use to save or pay some debt. If you’re considering buy-to-let programs, you need to find the right property as well as the right bond, then it is possible to make a rental yield of as much as 5% depending on your location. This is one of the most popular options for individuals in South African who wants to secure their property investment. It’s like the house is paying for itself.
Although the traditional lease is easier to manage since you only have to prepare the house once before the tenants move in and you will only be handling one tenant for a long period, listing your space on short-term letting options such as Airbnb or other peer-to-peer services can be more profitable. One Airbnb host said that she has managed to take in 50 per cent more in profits than she would have in the traditional lease.
Preparing your Property
Once you have decided to rent out your property, then you need to prepare your house. As you will compete with a lot of rental properties, you have to impress potential clients by making the house look presentable and appealing. Clean the house thoroughly before taking photos. You can also consider hiring professional help because your house needs to be as clean or cleaner than a hotel room.
Whether it’s a long term lease or a short term lease, you have to make sure that the tenant has everything he or she needs to enjoy his or her stay at your property. Think of the things you would want if you were the tenant. If you have a small property, you need to place furniture that have a double purpose to maximize the space you have. Hooks are a great way to organize things in the kitchen, laundry room, bedroom, or even in the living room, so make sure to install hooks.
The next thing you have to do is to consider the legal aspects of renting out your property. Talk to real estate lawyers and accountants to make sure you abide by property and tax laws. A lawyer can also help you navigate the landlord-tenant relationship and help you understand the legal implications of possible scenarios when you’re renting out. Your lawyer can help you understand better what the Rental Housing Act (Act 50 of 1999) entails for both you and your tenant. If your property is located in Western Cape, you also have to understand the Unfair Practices Regulations Act as it provides regulations about your residential property. You can also ask the assistance of a lawyer in drafting the lease of the rental property, making sure it is aligned with your local property laws.
Renting out your property can be beneficial for you and your tenants- but only if you take time to consider and address certain issues to avoid problems in the future. Make sure you understand your responsibilities as a landlord as well. Armed with knowledge, you can rent out your property and earn money.