The beginning of a new year is the perfect time for new beginnings – a much-needed fresh start! 2021 has been and gone, taking with it a multitude of unique challenges and triumphs. With Januworry firmly behind us, South Africans are looking ahead to 334 days of possibility and endless opportunity. New Year’s Resolutions were created for exactly this, to inspire us to aim higher, dream bigger and accomplish more. To make the changes necessary to guarantee success in our chosen fields.
For some, a new beginning takes the form of a new job, for others, a surprise engagement. Still others look forward to a fresh start in a new home. Each new year emphasises the “fresh” and “new”, and 2022 is no different. What has this to do with the rental market?
According to industry experts, the housing market is showing upward recovery. Several leading estate agencies predict that sustained economic growth will positively impact income, affordability, and consumer confidence, driving up property demand. In short, people will always need a roof over their heads, despite prevailing financial pressures amid the global pandemic.
Invest in Your Investment
There is real growth potential for landlords who invest in their investment property, with higher returns and resale values a greater possibility in the near future. While there may be no immediate opportunity in your local market to raise the rent, now may very well be the perfect time to make some larger home improvements, for example, in structures and systems linked to sustainability. This will improve your property’s rental appeal, which is particularly necessary when one considers the increase in state-of-the-art development stock entering the market.
For landlords, attracting quality tenants is particularly challenging in the current economic climate - fraught with uncertainties over rising interest rates, inflationary pressures and concerningly high unemployment. If the quality of the rental applicant is consistently low or overall tenant interest remains poor, then now may be time to “spruce up” your investment property – to ensure it remains a lucrative one.
Attracting quality tenants to an out-dated and worn-out property is near impossible. Tenants are looking for homes that are tastefully finished and well maintained. It does not necessarily have to be the most modern and technically savvy property in the complex or area, but it should be both aesthetically pleasing and functional. Before beginning any improvements, consider your tenant and tailor the renovations to suit them. This means that personal tastes and preferences should play little part in the renovations – a fail-safe is a versatile, modern, clean design that can be tailored to the tenant’s taste with the addition of their own furniture. Tried and tested trends remain true.
According to Richard Armstrong, an expert in home renovations and founder of The Makeover Group; “The key when renovating for profit is to keep the renovation accessible to the buyer”.
Armstrong went on to say that; “Lots of natural light, warm white walls and sociable open spaces always sell a home.” Three key home improvement tips to keep in mind.
Additionally, functional, multipurpose living spaces that support the work- and learn-from-home lifestyle remain sought-after in the wake of the Covid-19 pandemic. Landlords should ensure their properties enable professionals to continue working and collaborating remotely. Property24 reports that satellite TV connections, internet accessibility and cellphone reception are as important to tenants as security and the cost of rent. A recent survey by Apartments.com stated that tenants selected pre-installed satellite TV connections and high-speed internet access as two of the most desirable amenities in a potential apartment. Tenants find free and easily accessible Wi-Fi or fibre internet connections a major drawcard due to the high costs of data in South Africa and the necessity of staying connected via their smart phones, tablets, laptops and PCs – now more than ever with a large percentage of the global workforce adopting a work-from-home lifestyle. Including unlimited Wi-Fi in the monthly rental will appeal to young professionals and corporate executives alike.
Property24 reports that landlords who want to attract more tenants - or retain existing tenants - need to ensure that their properties are sufficiently [“tech-savvy”].
Paul Stevens, CEO of Just Property, maintains that systems and structures linked to sustainability and ensuring the availability of water and the production of energy (for example, the installation of solar power, a borehole etc) translates to real potential growth for landlords, and should not be overlooked. Green living and eco-friendly lifestyles are highly sought-after and this enables landlords to recover the initial capital outlay.
The kitchen is often the first impression a tenant has of a home. It is also the place they will spend a large amount of their waking hours. In many households the meal preparation and cooking are social times where families reconnect after a long day and catch up on the day’s events. Kitchen renovations are a necessity, whether you’re looking to rent to a single professional or family of five.
Start by replacing out-dated kitchen cupboards with cupboards that are durable and versatile (in style and colour) and by creating additional storage and cupboard space. Old-fashioned faucets and taps are another example of a seemingly small change that makes a notable difference to the overall feel of the kitchen. Splashbacks are a relatively cost effective way to modernise a kitchen and to replace tired, tiled walls in a colour that both brightens and energises.
Bathrooms are another major renovation, especially if it has been several years since any renovations were completed. Gone are the days of moss green or maroon baths, basins and toilets, the same can be said for wall-to-wall carpets. Bathrooms have the tendency to become a musty, dark space, owing to the smaller-sized “privacy” windows characteristic of sectional title units. Repainting or retiling a bathroom in clean, bright whites or soft pastels and replacing old light fixtures with high-power, energy-saving light fittings in modern designs is guaranteed to transform the bathroom. As with the kitchen, simply replacing outdated tap fittings or bath/shower heads with a modern alternative will make the world of difference.
Years of foot traffic can wear in carpets and scuff tiles. The grout may also wear away between tiles and may cause cracks and chips. Old, worn and stained carpets are just as noticeable and will instantly put-off a potential tenant. Rather than simply having a professional service in to clean, consider replacing them completely for a completely new look. Durable, high-quality tiles will last longer and will not require a professional and pricy carpet cleaning service. Laminate wooden flooring is significantly cheaper and more hard-wearing than real wood, and is both scratch- and moisture-resistant.
Security has become a major concern for South Africans, particularly in freestanding properties. Although this improvement is a costly exercise, the addition of alarm systems, electric fencing, beams and cameras adds significant value to any home, and may well reduce your insurance. Tenants will pay for the “peace-of-mind” high-tech security assures.
Ensure that all planning and budgeting has been done before construction begins to eliminate any additional costs. Draft a frugal budget beforehand, taking all costs into account – from the cost of hiring contractors to the cost of materials.
Consider consulting one of Etchells & Young’s qualified property practitioners for in depth market knowledge and area-specific advice on the style of home, competitive properties in the area and the current market to determine whether the improvements will add value to your home. Home renovation projects should never price your property above resale value, so ensure that the renovations improve your home, resale value and return on investment – even if the real value is not seen immediately.