Foreign Nationals & Property in South Africa: Renting and Buying
The Property Perspective is a weekly radio show on 919 FM, airing every Tuesday at 4:15 PM with Al and Lesedi on The Drive Train.
Episode 13 | The Property Perspective with Etchells & Young
Foreign nationals play an important role in Johannesburg's residential property market, whether renting while working in South Africa or investing in property locally.
In Episode 13 of The Property Perspective on 919 FM, Harry looks at some of the additional checks, documents and practical considerations that can arise when a foreign national applies to rent or purchase property in South Africa.
In This Episode
Harry explains how foreign-national property transactions can differ and why landlords and agents need to pay particular attention to documentation and screening.
Harry discusses:
Foreign nationals renting and buying property in South Africa
Passports, visas, permits and identification documents
Affordability and employment verification
Screening a new arrival without a South African credit history
Corporate leases and employer-backed rentals
What happens when a visa or permit expires during a lease
Refugees and asylum seekers
How landlords can manage additional rental risk
Watch Episode 13
The Property Perspective airs weekly on 919 FM.
Can Foreign Nationals Rent or Buy Property in South Africa?
In the episode, Harry explains that foreign nationals form an important part of the South African property market and may participate in both rental and property-purchase transactions.
Johannesburg in particular attracts international executives, professionals and business owners who may need accommodation while working locally or who choose to invest in South African property.
The important difference is that agents and landlords may need to obtain additional documentation and complete additional verification.
What Documentation May Be Required?
Harry explains that the normal rental screening process still applies.
This can include identification, proof of affordability, bank statements, employment verification and previous rental references.
Where the applicant is a foreign national, additional documentation such as a passport and the relevant visa, work permit, study permit or other applicable documentation may also need to be considered.
The aim is to establish who the applicant is, whether they can afford the property and whether the documents supporting their stay and employment are in order.
What If the Tenant Has Just Arrived in South Africa?
A newly arrived foreign national may not yet have a South African credit history or long-standing local banking record.
Harry uses the example of an international executive transferred to South Africa by an overseas company.
In these circumstances, the rental agent may need to look at the transaction differently and place greater reliance on employment documentation, the employer and other information available to establish affordability and reduce risk.
When Does a Corporate Lease Make Sense?
Corporate rentals are common where an international company relocates an executive or employee to South Africa.
Harry explains that in some cases the company may sign the lease itself, with the employee named as the person who will occupy the property.
Alternatively, the company may provide financial support or other assurances around the rental.
This can give the landlord additional comfort where the individual tenant is new to the country and has limited local financial history.
What If a Visa or Permit Expires During the Lease?
The validity period of immigration documentation does not always line up neatly with a standard 12-month rental agreement.
Harry explains that where documentation is due to expire during the proposed tenancy, the parties may need to structure the lease around that reality.
One option discussed is aligning the lease period with the existing documentation and then extending the agreement once renewed documents are available.
Another is to agree upfront what proof of renewal or application will need to be supplied before the existing documentation expires.
Start the Renewal Conversation Early
Immigration and permit renewals can take time.
Harry therefore recommends dealing with expiring documentation before the final day rather than waiting for it to become an urgent issue.
Where appropriate, proof that a renewal application has already been submitted may form part of the discussion between the landlord, tenant and managing agent while the updated documentation is being processed.
What About Refugees and Asylum Seekers?
Harry also discusses circumstances involving refugees and asylum seekers.
His focus remains on establishing what documentation the applicant holds, whether it is current and whether the applicant meets the normal affordability and screening requirements for the property.
Because these circumstances can differ considerably from one applicant to another, landlords and agents should avoid making assumptions and instead assess the actual documentation and circumstances presented.
Screening Still Matters
Being a foreign national does not replace the normal tenant-screening process.
Harry emphasises the importance of checking affordability, employment, available references and supporting documentation just as carefully as with any other rental applicant.
Where local information is limited, the agent may need to gather additional supporting information to build a clearer picture of the application.
How Can Landlords Manage Additional Risk?
The first step is thorough screening and proper documentation.
Harry explains that a foreign-national tenancy may sometimes present different practical risks, particularly where the applicant has only recently arrived in South Africa or may leave the country at relatively short notice.
Depending on the circumstances, landlords may consider additional safeguards that are discussed and agreed before the lease is signed.
What matters most is that the arrangement is clear, properly documented and appropriate to the particular application.
Why Professional Screening Matters
Harry cautions landlords against relaxing their screening simply because an applicant appears financially strong or has an impressive employment profile.
Professional property practitioners already have client-identification and verification processes that form part of how they conduct property transactions.
For landlords managing their own properties, it is particularly important to understand what checks and documents should be obtained before entering into the lease.
A Key Takeaway
Foreign nationals are an important part of South Africa's rental and property market.
The key for landlords and agents is not to make assumptions, but to verify the applicant properly.
Understand who the tenant is, verify affordability, obtain the relevant documentation and deal with expiry dates or renewal requirements before they become a problem.
Good documentation protects both sides of the tenancy.
What Is The Property Perspective?
The Property Perspective is Etchells & Young's weekly property segment on 919 FM.
Each episode explores a different aspect of property - from rentals and property management to buying, selling, legislation, sectional title living and the everyday questions property owners and tenants face.
Follow the series as we unpack more of the issues that matter to Johannesburg property owners, buyers, sellers, landlords and tenants.
Renting to a Foreign National?
Strong tenant screening and clear documentation are essential to a successful rental, particularly where additional immigration, employment or corporate documentation needs to be considered.
Speak to the Etchells & Young rental team about tenant placement and professional rental management for your investment property.
