Things your real estate agent should be advising you, right now
The property landscape has changed. We asked Just Property franchisees, agents and managers across the country to tell us what advice they would give if you were across the desk from them.
- What buyers need to know right now
“Money has not been this cheap to borrow in a very long time,” says Graham Ross, manager of Just Property Blouberg. “If you are going to buy, now is the time. You may find you are able to afford a bigger bond, which could put you in an area where a year ago you could not afford to buy.”
Suzette Moco, a Just Property agent in Port Elizabeth agrees, adding: “Lower interest rates and transfer duties have improved everyone’s chances of securing finance and property ownership. My advice to buyers would be to find out what bond amount they qualify for first. When you see your ideal home, you need to be ready to act. In many areas, there is limited stock, and the bargains get snapped up quickly.”
“On the other hand, where there is a large amount of stock on the market,” says Hendrik van den Berg, franchise owner of Just Property N1 City in Cape Town, “my advice is to entrust your agent with a definitive list of your requirements. View as many homes as you need to and do not rush your decision; when you’re ready, use the buyer’s market to your advantage and make a reasonable offer – it may just be accepted.”
Yolanda Cornelius, the franchisee of Just Property Zululand & Dolphin Coast takes a more long-term view with her advice: “I encourage tenants to aspire to be buyers one day. If now is not the right time for you, focus on strengthening your credit. When you are ready to buy, do proper market-related research as well as scouting for the right estate agent.”
- What sellers need to know right now
“Properties that are incorrectly priced stick, prompting buyers to think there is something wrong with them,” says van den Berg. “Price it right, get it sold.”
Kate Grieshaber, the franchise owner of Just Property Lephalale, adds, “If you need to sell, you need to be negotiable about your price. Also, be sure that you know how much you’re in for with regard to cancellation fees/ municipal rates clearances/ certificates of compliance (gas, electrical and water), for example. We often see shortfalls.”
“It’s important that you keep yourself informed of your responsibilities so there are no surprises,” agrees Moco. “My advice concerns Covid-19 restrictions and safety precautions, which must be complied with: strict protocols need to be followed for show- and open-houses. Ideally, allow only viewing by appointment for qualified buyers. Recruit an agency that has a large database of qualified buyers, one that is tech-savvy enough to ensure that your property receives maximum exposure.”
On this point, Ross adds, “3D visuals and videos are important in the time of COVID-19. Choose an agency that will be able to give you this edge over competing sellers.”
- What landlords need to know right now
The consensus is: look after good tenants. “If you have a good-paying tenant keep them on, even if it means taking a knock on the rental amount. With Covid-19 affecting the job market, finding good tenants is becoming more difficult and some tenants are cancelling contracts in pursuit of cheaper accommodation, “says Ross.
van den Berg concurs, adding that securing a lease extension with a solid tenant, in return for no rental escalation, is sometimes the best way to go. Brian van Wijk, Just Property Midrand franchisee, goes further: “My advice to landlords facing vacancies is to reduce their monthly rental – rather generate a slightly lower but stable income than no income.”
“Protect yourself from defaulting or absconding tenants with RENTSECURE, that guarantees your rental income,” says Cherise Botha, a rental agent intern with Just Property Margate. “Keep your rates, taxes, levies and utility bills up to date – when accounts are behind there is a risk of disconnection. This makes life difficult for tenants who may decide to vacate your property as a result,” she adds.
Cornelius agrees: “Tenants don’t like living in a problem! Regular maintenance is important – put money aside for emergencies.”
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- What tenants need to know right now
Ross advises tenants to negotiate their rent amount when their lease is up for renewal; guidelines exist for calculating rental escalations but these vary, depending on the individual circumstances of landlords and tenants alike increase.
“If you are experiencing a problem paying your rent, tell your agent and make payment arrangements,” says Botha and van den Berg reminds tenants that such behaviour can affect their credit rating: “Rather give notice and downgrade. Once you are blacklisted it is very hard to work your way back.”
“The other thing to take good care of is the rental property itself,” says van Wijk. “You want to ensure you maximise your deposit refund. Also try to put a bit away whenever you can so that one day, you’ll have a deposit to put down when you’re ready to look for a home to buy.”
- What property investors need to know right now
“As an investor, you need to do the calculations. Buy in the best area you can afford to get maximum growth. In this market, you can and should negotiate on the price,” says Grieshaber.
Ross expands on this. “Developers are willing to offer great launch prices on new developments in order to create interest. Engage a development-focused agent who can get you into these developments first to secure those introductory prices. This can make a huge difference in return.”
Barry Reed, the Commercial Broker for Just Property Berea advises client about the returns they can expect from different types of properties in different areas. “Student accommodation and the retail sector incurred loss of rentals during lockdown; with the possibility of future lockdowns, returns of 13% to 15% can be expected. Government-occupied properties that are not affected by lockdowns will command lower returns of 10% to 12%. Industrial properties in sought after areas, such as Durban South, have not been affected by Covid-19 and lockdown, so returns of 10% to 12% can be expected. But there is a glut of office space on the market and, even if occupied, these are a high risk as finding replacement tenants is very difficult at the moment.”
Moco offers a closing word of advice to investors, tenants, landlords, sellers and buyers: “Whatever your focus, it’s important to know the process you need to follow, and the costs associated with it. A good property professional is an invaluable guide to all aspects of the property industry.”