Absa | Renting out your property

Buying a property to rent out could be a good decision especially if there is a strong and consistent demand for rentals where you want to buy. But there is a lot more to just buying a property and expecting to make money out of it. You’ll need to plan and think about several things before making your investment decision.

How to buy a property for rental

In order to make the most of your investment, we’ve made a list of the important things you’ll need to know.

Finding the right property

The area where you buy your investment property is most important.
You‘ll need to study the area to find out how much demand is there for rentals. What are the average rental prices and what type of rentals are there – cottages, houses, rooms or flats?

Finding the right tenant

This is the most important thing. You will rely on your tenant to fulfil all their obligations, like paying the monthly rent on time and sticking to the rules of your property.

You have two choices to find a tenant: using a rental agency or doing it yourself.

These are the most important initial checks you will need to do:

Do a credit check
Conduct a background check and get references from previous landlords.
Consider how your property will be used by the tenant, for example, if they will be working from home – the wear and tear will ultimately be paid for by you.

Using a rental or property management agency

There are some things you as the landlord cannot do which a rental agent can assist with:

Full knowledge of landlord and tenant rights.
Negotiating a solid lease agreement.
Managing communication with the tenants and collecting payments.
Initiating legal actions when required.
Performing before entry and after exit property inspections and drawing up snag lists

Manage your tenants yourself

This can save you money but requires a lot more work. What this means is:

No agent costs
Read up about rental laws so you have some knowledge when managing your property.
Drawing up a lease. Lease agreement templates from the internet often do not cover all the legalities – get a lawyer or an agent to check your lease for you.
You will have to handle all tenant communications.
You will have to collect rent and do property inspections yourself
You will need to seek out specialists to support you with regards any legal actions.

TPN tenant services

TPN is a tenant credit bureau, with which Absa has arranged the following:

Preferential rates on their lease and tenant management products and services.
These packages enable you to complete credit checks, obtain up to date lease agreements, tenant Invoicing and property management software and more.

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Prepare for your next investment

Buying a property to use as an extra source of income can be a good way to add to your wealth. But, like all investments, you must do your research and prepare yourself with the right tools and resources before investing. Being well prepared will help you make better investment decisions and build a successful property investment portfolio.

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