We all know that an income isn’t always enough if you’re planning to live comfortably and retire with a certain standard of living and this is where investments come into play. Creating little nest eggs that create passive income for you over time and help augment your income so you’re able to live comfortably.
One of the most popular forms of investment has always been property which is always seen as a safe bet when it comes to a steady additional income. However, a new form of property investor has come to the fore due to the current state of the market. This new emergence of property investor is known as — the “rentvestor”.
The rentvestor trend is facilitated by technology that gives property buyers much easier access to quality information and statistics and allows them to communicate and work together much more easily.
It is also fuelled by an awareness of first-time buyers that property is becoming an increasingly elusive market, but potentially lucrative, once they’ve invested wisely in it.
What is a “Rentvestor”?
“Rentvestors” are people who may not be able to afford to buy in the areas where they live and work, but are determined to become property owners that they are seeking out less expensive areas with a promising future, and buying homes that they can then let to others, says Realnet MD Gerhard Kotze
He goes on to say that rentvestment is generally taking place in bigger urban centres and especially in Cape Town and Johannesburg, where these investors will often rent a high-end property in an upmarket area or estate to live in, and then buy up flats and townhouses in less expensive areas where rental demand is high and the achievable rentals will almost cover their bond repayments and other monthly costs such as levies and rates.
What are buyers looking for?
Buyers are looking for convenience, the latest technology, connectivity and security. “Increasingly, mixed-use precincts are offering all of these,” says Amdec Property Development MD Nicholas Stopforth.
“Each apartment offers urban living that is ideal for working professionals and corporate long-stay tenants, affording investors excellent rental yields and capital growth.”
Sandton CBD is also enticing rentvestors with access to larger bonds. Bargains have cropped up due to an oversupply of apartment units, which drove down returns last year, says rental specialist Shaun Groves.
“We are seeing families rent homes in prestigious estates such as Silver Lakes and Cornwall Hill, and buy houses and townhouses to let in popular central suburbs such as Villieria, Moregloed and Rietfontein, or flats in areas such as Hatfield and Arcadia, or Die Hoewes in Centurion. “These are in high demand because of their proximity to the Gautrain station,” says Kotze.
What are the returns like?
People are realising they have to start investing somewhere in order to reach financial freedom, and there is no better way than to invest in areas delivering great rental returns and capital growth on their investments.
“The time is now, because the gap between the escalation of income and property prices is ever-widening,” Scheffer says. “It will become more and more difficult to enter the property market.”
“In any case, it is empowering increasing numbers of resourceful South Africans to have the best of bother worlds, by living where they choose while investing for their financial future elsewhere, and we expect it to play an increasingly important role in the market, especially among first-time buyers.”
Take the legal route
If you’re looking to evict a tenant from your property and want to avoid a long drawn out case or want to limit your risk then present your case to an eviction lawyer. As a specialist in the field of evictions, our team of lawyers will evaluate your case and give you solid advice if you have a case that will hold up in a court of law.
If you need advice on your eviction case or would like us to represent your case, get in touch with Le Roux Attorneys