24 Mar 5 Crucial Tips for Cape Town Landlords in 2021
The mayhem and brutal decline in the rental market continues for landlords as many find the lack of commitment from tenants, erratic and fickle. With the end of lockdown in sight and endless uncertainties still facing us all, many landlords, both private and those using agents, are finding it increasingly more difficult to secure quality tenants at a fair rental return. On the other hand, tenants, with awareness that they now have such incredible bargaining power, are negotiating more and more favourable terms at every corner. This is due to the supply and demand for long term rentals having tipped rapidly. With the demise of short-term letting over lockdown resulting in more stock on the longer-term rental market, tenants have more to choose from than ever before and they are now in the pound seats.
In this article I offer 5 absolutely crucial tips for landlords to ensure they minimise financial losses and I suggest ways to attract tenants faster than their competitors.
Historically, many landlords have never really faced any difficulties in finding a tenant, as the supply and demand was of such a nature that tenants would snap up any reasonable property rental within days. These landlords have always relied on ‘word-of-mouth’ and a quick Facebook post to ensure interest, but nowadays that simply is no longer enough.
So how can landlords hustle harder to ensure they avoid vacancies:
1. Get Brutal on Price
It is time to offer better value. The only two ways to do this, is to offer a better price and/or more favourable terms. There is no more sure way to ensure success in finding a decent tenant than edging out the competition with more bang for your buck. Not only will you then get a higher response rate and consequently more feet through the door, but you will get a motivated tenant who doesn’t waste your time and efforts.
It is time to put yourself in the tenant’s shoes. Imagine you’re a tenant seeking a specific property, you’ll insert your parameters into Property24 for example and with the host of offerings that result, you’ll order the results lowest to highest in price and then start short-listing from there. It would be immensely helpful for landlords to do this exercise to see how their property ranks. Unfortunately, with an ocean of rental listings available on a host of platforms, the terms start fading and price becomes the most critical aspect.
It is time to say goodbye to previous years’ rental prices & in many instances forego escalations. With numerous factors in the market together with the effects of the pandemic, landlords have found it hard to fathom taking less rent than they did last year or previous booming years and are now often having to accept dismally low rental. Crunch the numbers so that you lower your rental price before facing too many months of vacancy. Get the price point right and you’ll be assured of securing that elusive tenant.
2. Use Vacancies to do Upgrades
It is time to get stuck into those small niggly maintenance items you have been promising to do for ages. Often as a landlord, you don’t get to critically assess your property’s condition and state of repair as one tenant vacates as another occupies and you simply miss certain items. Take the time, if your property becomes vacant, to tackle necessary upgrades repairs and to add to the desirability of the property. Here are my quick suggestions in order of priority;
- Ensure connectivity by installing fibre (your tenant can handle their own subscription of course but by including Wifi, you’ll put yourself ahead of the competition).
- Add an additional plumbing point for a 2nd wet appliance.
- A fresh coat of paint may do wonders in freshening up your rental property (stay neutral with colour).
- Carefully consider bathrooms and kitchens, and although you need not spend a fortune, find budget friendly ways to freshen things up and modernise. Re-enameling older baths and tiles can bring new life to an old bathroom. Consider new kitchen cupboard handles and accessories to add a modern touch to older kitchens, if you are on a budget.
- In Sectional title schemes, see if you can arrange a 2nd parking bays as this is a standard request from couples or sharers sharing a 2 or more bedroom apartment.
- Forego the carpets and install more modern flooring like tiles, laminates and vinyl.
3. Sweeten the Deal
It is time to start getting creative with ways to sweeten the deal. If you are in a position to do so, offering many of the utilities, internet access and other items included in the rent, can attract more tenants or simply offering a month rent free to alleviate the burden of paying large deposit and rent all in one big painful amount. NEVER forego a deposit, as this offers you the only safety net against errant tenants. The absolute least amount of deposit I would ever suggest as a residential letting specialist is 1.5 months’ worth of rent.
4. Use Video & good images
It is time to use technology to your advantage. Using compelling footage and in particular Video walkthrough video teaser clips will really help you get before a wider audience and help people eliminate the property faster if it is in fact not suitable. Keep these videos short and under 90 seconds! Posting these videos on various Social platforms or linking it to your property ad on various property portals will ensure you get a better response rate overall. Remember to ensure your ad and link to ads on social media carefully and diligently tell any potential tenant all they need to know about your offering and terms. Be extremely diligent in outlining the offering, the start date and all the pertinent bits of info including your flexibility on whether it is offered for flexible time frames or whether offered furnished, unfurnished or partly furnished. Remember to join your local community Facebook page for your suburbs to improve your chances of finding quality tenants.
5. Don’t drop your standards
It’s time to be cautious. Don’t let desperate times force you into taking a low calibre of tenant. Yes, it can be immensely frustrating to face a costly vacancy and it can become tempting to consider tenants without doing the proper due diligence, however this is a dangerous environment to take on sub-par tenants. Many unscrupulous tenants tend to seek out desperate landlords since they know you are desperate. Do not neglect significant background checks on any tenant, no matter how delightful they may come across at first. Partner with an attorney or agent to ensure you do at least a check of the credit conduct of the applicant and make the call to references with specific questions to ensure their conduct in previous rental properties was satisfactory.