The residential rental property sector has by and large recovered from the challenges of two years ago. By late 2024, it was reported that the average national rental vacancy rate had dropped to 5.07% according to the TPN Vacancy Survey.
Data from the report shows the low to mid-market areas tend to have the lowest vacancy rates due to high demand for rental accommodation. The luxury top-end of the market where rental rates exceed R25,000 per month, however, seemed to face higher vacancy rates of up to 12% depending on the area.
According to rental agents from the Seeff Property Group, slower demand and seasonality tend to impact vacancy rates. Both instances could lead to higher vacancy rates during certain periods of the year. Above market related pricing and location could also be factors leading to higher vacancy rates.
The agents therefore recommend that investing in a rental property is done with careful consideration and cognisance of various factors which come into play in terms of mitigating the risks associated with rental properties. These include choosing the right property type and location for which there is demand. The property should also be well maintained and cater for the needs of tenants.Ensuring the rental rate is set in line with market trends for the area will be important to ensuring that it attracts interest from tenants. Landlords will also want to ensure that the property is let to a pre-vetted tenant who pays their rent on time and looks after the property.
Rental agents have become a vital resource for landlords
The rental industry is dynamic, but also subject to many legalities. Specialist rental agents have therefore become indispensable partners for both landlords and tenants, offering a wealth of expertise and streamlining the often-complex process of renting or leasing a property.
A skilled agent possesses in-depth market knowledge, allowing them to accurately assess market rents and identify the most suitable tenants for a specific property. Their expertise in tenant screening minimises the risk of problematic tenants, to ensure timely rent payments and reducing the likelihood of property damage.
Besides sourcing a suitable tenant for the property, a rental agent can act as a dedicated property manager by assuming many of the time-consuming responsibilities associated with rental properties. This includes marketing the property effectively, conducting thorough tenant screenings to minimise risks, negotiating lease agreements, collecting rent, and addressing maintenance issues promptly.
Agents offer in-depth market knowledge and can navigate legal and regulatory complexities. They can also advise landlords on optimal rental rates, and identify potential property upgrades to enhance the value of the property. With agents handling these tasks, landlords are then freed up to focus on other priorities.
Working with a credible agent also benefits tenants, as it enables tenants to deal with an agent experienced in managing tenant relations and matters pertaining to the property. By acting as an intermediary between landlords and tenants, agents facilitate smooth communication and help resolve any disputes that may arise.
Rental management enables landlords to leverage optimal rental returns
Landlords seeking to maximise returns from their rental properties often find themselves navigating a complex landscape of tenant screening, property maintenance, legal compliance, and market fluctuations. This is where a professional property agent can prove valuable.
Aside from finding a good calibre tenant, the rental agent can take on a management role of the property, look after the tenant, manage rent collection and other procedures while also looking after the maintenance needs. Making use of a rental agency such as Seeff enables landlords to benefit from economies of scale as they don’t have to invest in tech and administrative staff.
Agencies such as Seeff already have the latest Proptech systems, and skilled rental administrators in place to assist with aspects such as property inspections, maintenance management, financial and compliance management and so on. Rental agents can also provide valuable guidance on property improvements and upgrades, helping landlords enhance the appeal of their property and to attract higher-quality tenants.
Rental agents play a crucial role in bridging the gap between landlords and tenants, creating a more efficient and streamlined rental experience for all parties involved. Their expertise, market knowledge, and dedication to providing excellent service make them invaluable assets in today's competitive rental market.
Author: Gina Meintjes, 31 January 2025, Rentals