Etchells & Young Newsletter

The buy-to-let investment choice is very popular. especially in larger areas like Johannesburg. Renting out the property helps you pay off the bond, while the property increases in value. The obvious advantages are that the bond pays for itself and the investment takes care of itself as long as the property is maintained.  Once the bond is paid off it continues to be a constant flow of monthly income. 

Like any good investment this investment option does not come with any guarantees and there are a few very important factors that need to be considered. 

You must firstly research the market and the area in which you are looking to buy. Choose an area where people would like to live. Transport routes and schools are importnant factors. Resrearch the rental prices in the area/complex before purchasing the property, consider your return on investment (rental income vs bond payment + levies).

To protect your investment you need to look at the following questions: 

• Do you know the rights of your tenant?
• Are you operating within the law and specifically the rental housing act?
• Are you protected against devious and disgruntled tenants who might craft a case against you at the Rental Housing Tribunal?
• Do you have sufficient time to attend to the needs of your tenant?
• Do you provide your tenant with monthly invoices and statements?
• Are you monitoring your property for repairs and maintenance?
• How do you manage tenants that have an emergency repair e.g. burst geyser?