If there is a change in employment, your level of scrutiny should increase, and the time over which you draw your data should be longer-especially for individuals who earn their money in more fluid ways, such as being self-employed. So, how do you check if your potential tenant can afford your rental rate? It is about consistently scrutinising bank statements, determining spending behaviour over an extended period, and verifying potential occupants’ income and employment. Since August 2020, as those that could return to work were able to, tenants have found ways and means to begin catching up on arrear rental payments, while others have continued to have honest discussions with their landlords or agents on how the gap can be bridged. Employment rates dropped by 13% in 2020, and double-income households became single-income households, meaning that many families needed to reconsider how they could adjust their lifestyle and rental choices in order to keep a roof over their heads.
#RENTMASTER PARTY RENTAL FULL#
It is important to look at social indicators, such as the employment rate and levels of affordability, to assess whether the rental price can be paid in full or needs more negotiation. If you are considering buying property, the R7 000 to R12 000 bracket has proven its stability in 2020, and is set to remain constant into 2021. Similarly, those in the highest bracket, over R25 000, are also showing distress as they deal with substantial pay cuts and larger overheads.
After interpreting the rental data, we found those under the R3 000 bracket were the hardest hit, indicating little or no savings to tide them over in the hard lockdown. You need to understand your tenants’ spending habits so that when a crisis hits, you can prepare for and understand their distress. This will help you understand how cost-sensitive your tenants are. To set your rent realistically, it is important to understand how these different brackets were impacted economically during this last year. The industry norm, published by industry specialist TPN Credit Bureau, categorises rental properties into the following five categories: Less than R3 000 per month R3 000 to R7 000 R7 000 to R12 000 R12 000 to R25 000 Over R25 000.
Here is how you can make sure as a landlord that your rental rates are just right in 2021.ĭata for property rentals is actively monitored and tracked by category. The idea of a passive income always requires an active role, and in challenging conditions the rental process can quickly turn from a charming idea to a real ordeal. As tenants’ income became unpredictable, many landlords were placed in the grey area between being understanding of changing economic circumstances and be-coming an accidental financier of their tenant’s homes. IT IS no secret that many industries have been hit hard by the 2020 pandemic, with the rental industry being particularly vulnerable.
#RENTMASTER PARTY RENTAL HOW TO#
How to set appropriate rental rates for current market conditions
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