How short-term rental owners can benefit from the remote working trend
Category Property
How short-term rental owners can benefit from the remote working trend
Many people forced to take the plunge into remote working during the Covid-19 pandemic had never considered doing that full time and now, three years on, a big percentage are returning to traditional offices and work habits, albeit with new technology skills derived from having to work online.
But another large cohort have decided they are never going back, says Berry Everitt, CEO of the Chas Everitt International property group. "They have wholeheartedly embraced the freedom of using technology to work remotely and at any time of day that suits them, whether it's from their home or while visiting one of their bucket-list destinations. And many have even become true digital nomads who spend several months at a time in another town or country to experience the local culture, food and customs.
"Recognizing this trend, many countries including SA have now introduced digital nomad visas to enable remote workers to legally stay for longer than they could on an ordinary tourist visa, and to obtain these visas, remote workers usually have to prove that they have health insurance, as well as a certain amount of guaranteed income from their remote employment. This makes them an excellent target market for real estate investors."
In fact, he says, there are several ways for property owners to benefit from the remote working and digital nomad trend, the first of which is to rent out furnished apartments for a few weeks or months at a time.
"Alternatively, owners can convert bigger properties into co-living spaces, which are popular among younger remote workers and digital nomads who like to travel and live together in shared environments. These spaces should be designed with communal areas such as a kitchen, living room and co-working space to promote interaction and collaboration among the residents."
Everitt says it is also important to appoint a professional and experienced rental agent who can provide legally compliant lease documentation, collect your rent, handle ingoing and outgoing inspections of the property and contents, and manage the ongoing upkeep and any repairs that may be required from time to time."
For those thinking of taking advantage of the recovery in the rental market, Paul Stevens, CEO of Just Property, recommends taking some time to consider the following questions: ( Read the full article here:)
How much is enough?
Property can be an excellent investment, but you need to take a long-term view in order to achieve real value. You also need to be realistic about whether you can afford to be a landlord, Stevens warns.
When doing your sums, ask yourself whether the rent will cover your bond, rates, insurance, and maintenance. You will also need to be able to put extra aside for those times when you might have a vacancy or an expensive repair. "It is inevitable that unexpected costs will arise," warns Stevens, "so make sure you have budgeted the money and the time for both routine maintenance and emergency repairs."
Do you have the time?
It takes time to market a property and show prospective tenants around. And once your tenants have moved in, you will need to be able to respond rapidly to their requests and complaints. Sometimes maintenance issues cannot wait. If a geyser goes, for example, you need to be there with your plumber as soon as you can to prevent damage to your property and your tenants' belongings. Good tenants are worth keeping happy, and a quick response is important to them; at the same time, your property is a significant investment, and you want to minimise potential damage. Ongoing property management and maintenance require a significant number of hours and can be difficult if you have a demanding full-time occupation.
How will you screen your tenants?
Getting stuck with a bad tenant can be mentally, emotionally, and financially disastrous. Therefore, you must not cut corners when vetting your tenants - thorough credit checks must be done, and all references should be followed up.
"Only with strict tenant vetting and monthly management procedures can landlords have peace of mind that their tenants are likely to pay their rent on time, every time," says Stevens. "Bear in mind that Just Property rental portfolio managers, for example, look at more than just a credit score - factors like account payment patterns, nature and age of judgements are also considered when vetting tenants."
Just as essential is a professionally drawn-up lease that is both fair and watertight. A good understanding of South Africa's landlord-tenant laws is important. These are governed by the Consumer Protection Act, the Rental Housing Act, and the Prevention of Illegal Eviction from and Unlawful Occupation of Property Act, as well as Common Law.
Should you hire an outside property manager?
You can choose to manage your rental property yourself or hire a managing agent to do it for you. Managing your rental can be quite taxing, and it's best to have a professional agency with skilled and experienced individuals doing the work for you.
Services offered should include:
Property marketing, viewings, and tenant vetting that includes the due diligence of credit and other checks before tenants can move in.
Comprehensive contracts and advice regarding the legal obligations of landlords and tenants.
Proactively managed rental collection and handling of defaults.
Prompt attendance to maintenance & management issues that saves you time and money.
Clear processes, established routines, standardised documentation and regular feedback maintain high service standards.
The option of rental income insurance that covers tenant non-payment, early cancellation, and legal fees in case of eviction proceedings.
Author: Property 24
