Is it better to rent or buy in the current market? We asked property Umhlanga property specialists Seeff Umhlanga to give us some insight into the rental market in this booming part of our country.
It is true that lockdown changed most people’s lives. Working from home means we no longer have to ‘dress up and show up’. While industries the world over have experienced drastic turbulence, the old property mantra of ‘location, location, location’ has never been more rewarding. The reason for this is simple: with employees no longer having to clock into an office and spend considerable time in traffic, people are taking advantage of living where they feel best suits their lifestyle. So people no longer have to wait until retirement to ‘move to the coast’.
Which brings us to the question of rental accommodation in Umhlanga. While booming all year round, the Umhlanga market has experienced a massive change when it comes to who is renting, who is buying … and why.
“Big companies such as Toyota and Unilever haven’t imported any new employees with huge budgets and, in the beginning of 2021, landlords started to panic,” says Seeff Umhlanga candidate intern rental agent Alwene Els. “However, unlike other parts of the country, the rental properties in the greater Umhlanga area are hardly empty and turnaround time is fast.” So, who, you may ask, is renting these top-end properties for R50 000 a month? And for that rental price, is it not better to buy your own property? Not necessarily.
“The mind-set for most of our Joburg clientele is – why endure heavy traffic hours when I can wake up to a view overlooking the ocean? With affordable flights and Zoom meetings, you are only a 50-minute flight away from your HQ. For those making the change, renting is a good way to scope out a community and you get double the amount of brick for your buck. On the economics side, if you are renting a R6 million property in an estate, the rental calculation will be an average of 60/70% of your bond (presuming you have a bond). By renting a R4 million home, your monthly rental is an average of R30 000 a month. From an investor’s point of view, if you consider investing in a property under R3 million, your returns are sitting at almost 80% and sometimes one hundred percent, if it’s furnished.”
Another question on homeowner’s minds, says Alwene, is ‘can I make good returns with Airbnb?’ “Initially it sounds very attractive with huge profits and the internet making it super easy and simple but there are a few factors to consider. Firstly, does your complex or estate allow short lets? Body corporates and neighbours often become frustrated with too many people in and out of a unit.
Security tags and access codes changing hands on a regular basis pose a serious security risk by being abused or loss. Often, short let guests have a blatant disregard for the rules and the fact that you don’t know who is staying in your property can be a push back. Additionally, the price of managing late check in’s, breakages, deep cleaning and laundry every second or third day may cost you more than it’s worth.”
Long-term rental, if done through a professional and reputable company, might be your best bet. “The rental market has boomed with property owners selling their homes and apartments and renting in case they want to emigrate or have bad debt during the past 12 months and can’t qualify for a bond. There are rental security measures that a landlord can put in place to secure the rent such as ‘rent guarantee’, which is almost like a policy that the tenant pays instead of a deposit. You only qualify if you have had a credit check, so this benefits both parties.”
The bottom line, says Alwene, is to simply seize the moment! “With a low 7.25% interest rate you can buy, rent or renovate your ideal home. After all, home is where the heart is and YOLO (You Only Live Once).
Details: Seeff Umhlanga, Alwene Els, 031 561 1090, 082 785 1164, [email protected]
