Harcourts News

Renting is the smart financial choice for many consumers, but a ‘difficult’ landlord can easily make it feel like the wrong choice, and cause tenants to leave as soon as they possibly can.

It’s definitely worth having a meal or a gift delivered to your tenants on the day they move in and taking the time to provide them with some useful information about their new area.

On the other hand, landlords who are able to establish a good working relationship with their tenants will have much easier time when it comes to organising any repairs necessary and retaining those tenants or showing the property to prospective new tenants, says Gerhard Kotzé, MD of the RealNet estate agency group.

And this applies whether you manage your rental property yourself or through a managing agent, he says, so here are the five top tips for becoming the landlord that tenants love to rent from:

1. Be transparent and honest

Everyone expects honesty when it comes to dealing with tenants’ deposits and rental payments, but you and/or your agent should also be transparent when answering prospective tenants’ questions about things like noisy neighbours, traffic in the area, cell phone coverage and the availability of public transport.

2. Make your tenants feel welcome

It’s definitely worth having a meal or a gift delivered to your tenants on the day they move in and taking the time to provide them with some useful information about their new area.

“Once they know where the nearest shop, bank, gym, bus stop and school is, they will feel much more at home and be able to imagine themselves settling down in your property for a long time,” says Kotzé.

3. Provide clear lines of communication

You obviously don’t want your tenants calling you or your agent at all hours of the day or night for every little thing, but you don’t want them to feel cut off either.

“So when they move in, give them the right number to call during business hours, and better still, an email address where they can reach you or your agent. This will have the added advantage of helping to keep a written record of all communications with your tenant for future reference,” he says.

4. Be quick to respond

As a landlord you no doubt expect your tenant to be prompt when it comes to paying the rent, so you and/or your agent need to extend the same courtesy to your tenant when it comes to dealing with their concerns about urgent repair, noise or security issues.

“Of course, they should only call you or your agent during business hours unless it is a real emergency, but when they do, the matter should be dealt with as fast as possible. And if an outside contractor is required to fix any sort of damage, you need to monitor progress to see that the work is completed properly and on time,” says Kotzé.

5. Be a bit flexible

While it may be written into the lease that rent is due by no later than noon on the first of every month, your tenant should be able to approach you for a little leeway in the event of an emergency.

No one is suggesting that you tolerate repetitive late payment, but good tenants who usually pay on time and in full will appreciate some kindness when they have a genuine problem - and are most likely to return the favour when it comes to renewing their lease or accepting a rent increase.

If you’re keen on being ‘green’ and healthy this year, now might be a great time to plant up a veggie garden and start growing your own salad, soup and stew ingredients.

You really don’t need a lot of space to plant and grow your vegetables.

 

And the good news is that you really don’t need a lot of space - especially if you use containers, says Berry Everitt, CEO of the Chas Everitt International property group.

“A courtyard outside your kitchen, a terrace or even a balcony will do, as long as it gets about five or six hours of sun a day (more is too much for leafy veggies like lettuce), and it is not too windy and not too far from a water source,” says Everitt.

You also don’t need to go out and buy special containers, he says.

1. Recycle old pots

“You can recycle old buckets, washtubs, tyres, coffee cans and even baskets (lined with a bin bag) as well as any old plant pots you have handy to hold your veggies, as long as they have adequate drainage. And if they don’t already, you can create it by drilling a few holes in the bottom and putting in a layer of gravel or small stones,” says Everitt.

2. Make use of big mesh plastic

“The big plastic mesh bags that dog food, cement and fertiliser are packed in can also be used if you wash them out and roll down the tops before filling with the gravel layer and your growing mixture. This should be a mixture of peat moss, potting soil with vermiculite and some good quality compost to boost growth.”

Writing in the Property Signposts newsletter, Everitt says you should position your containers before you fill them and they become too heavy to move around - and leave some space between or around them so you can water and weed easily. Putting some gravel down on these ‘pathways’ will also help to repel snails.

“Almost any kind of veggies can be grown in containers although most will require a depth of at least 12cm to 20cm to allow proper rooting. Use your smaller containers for things like radishes, spring onions and herbs, medium-size ones for tomatoes, peppers, carrots, lettuce, spinach and egg plants, and the large ones for bush beans and ‘vine-growers’ like squash, cucumbers and courgettes. Potatoes will do very well in a stack of old tyres that you fill as they grow.”

3. If you have a small space, plant different crops in close proximity

If you only have a small space, companion planting is a very good idea not only so that you can get a good mix of edibles from your containers, but also so that your plants can help each other fight off pests and put nutrients back in the soil, says Everitt.

“Lettuce and peppers do well when planted together with onions or garlic, for example, while basil and celery are good companions for tomatoes, and mielies (corn) are good with any kind of squash or pumpkin. Marigolds scattered in between your veggies are also good pest repellents, while peas and beans put nutrients back into the soil where you are growing carrots and other root veggies.”

4. Water your vegetables correctly

Watering correctly is also very important when growing veggies and you need to be careful not to let your containers dry out when it is very hot or windy, he says.

“It is really easy to set up a simple drip-irrigation system for your container garden, but otherwise you should apply water with a watering-can or a fine spray attachment on a garden hose, preferably in the early morning or evening when it is cooler,” says Everitt.

“And lastly, you need to remember to feed the garden that feeds you, by mixing in some more compost or liquid organic fertiliser every time you replant one of your containers.”

With the EAAB (Estate Agency Affairs Board) clamping down on agents trading in the real estate industry who have not renewed or ever applied for their Fidelity Fund Certificates (FFC), as well as disqualifying agents for noncompliance with their Continuing Professional Development, it is now more important than ever to insist on continuous training as an essential part of operating within this industry.

With the Estate Agency Affairs Board clamping down on rogue agents, it is now more important than ever to insist on continuous training as an essential part of operating in the real estate industry.

This is the word from Cornel Haskins, sales manager at property company SAProperty.com, who notes that the new Property Practitioners Bill was passed by the National Assembly on 4 December 2018 and has now been sent to the National Council of Provinces for concurrence, and this will change a) the governing body for the real estate industry and b) the way this industry is run - what is important is continued work at upskilling all agents.

There is too high a rate of interns dropping out of the sector because of the lack of training and mentoring, as they often find it daunting to complete either the NQF4 requirements or the log book that the EAAB requires, she says. “Having a good training provider and a company that mentors and supports as well as assists agents with their log books and NQF4, in order to complete and write the PDE exam, is vital.”

Haskins says many do not realise that agencies can partner up with attorneys, who could assist with some of the contractual training or guidance on completing the log book. “In this way, agents get the chance to ask all of their relevant questions, learn of current and changing issues, and can also become re-inspired to be a specialist in their field.”

To become an estate agent there are three major steps: 

- Completing a log book;

- Completing the NQF4 training; and

- Writing the Professional Designation Exam.

Keeping agents’ skills up to date and increasing interns’ knowledge of the industry is a necessity as the real estate sector is forever changing,” says Haskins. “Continuous training helps agents stay motivated and it provides better understanding of the happenings in the sector, as well creating an urge to provide a better service to the clients.”

Rogue agents have given the industry a bad reputation and it is up to the EAAB and estate agencies to employ and empower their agents to be better equipped in order to give the best service possible, she says.

How buyers and sellers can protect themselves

The public can, however, protect themselves and only use registered, qualified agents when buying or selling property, and the first thing to check is whether the agent they intend dealing with has a valid FFC.  All agents should have a Privyseal signature on their emails, websites or social media, which shows a real time validation of their FFC and status (whether principal, full agent, or intern) with the EAAB.

In addition, professional and qualified agents will be able provide references from previous clients if asked as well as a sales track record, to ascertain whether they have been successfully dealing in property and for how long. It is also advisable to check whether the agent specialises in a specific type of property and how long he or she has worked in this industry.

“Buying or selling a home demands a lot of trust in the person dealing with the transaction, as it is possibly the largest asset anyone will ever own,” says Haskins. “Ensure that you vet the agent you deal with properly and not just go to someone you know or a friend of a friend.”

Real estate professionals will tell you that the average family will move once every five to ten years. This is usually to accommodate a family’s changing needs as their family grows. Often one of the last moves a family makes is from their large family home with multiple bedrooms down to a two- or one-bedroom home that houses the last two that remain: the parents. 

It can be difficult for buyers to adjust their thinking when viewing new homes and empty nesters often make the mistake of buying 'too small' or 'too big', or feeling they should by near their children.

“Relocating after your last child leaves the nest can be an emotional experience – especially if you are tightly-knit family,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa Goslett. “It can be difficult for buyers to adjust their thinking when viewing new homes, as they now need to consider only their own wants and needs and not those of their children.”

According to Goslett, below are the three mistakes empty nesters most often make when downsizing after their children move out of home:
1. The difference between too large, too small and just right 

Many empty nesters make the mistake of purchasing a new home that is either too small or too large to suit their new family dynamic.

“Purchasing a property that is too small will make it feel as though you are living on top of each other, while purchasing a property that is too large will only emphasise the fact that your children are no longer around to fill the vacant rooms,” says Goslett.  

2. Hitting the location sweet spot

Goslett says empty nesters tend towards one of two extremes: either purchasing property as nearby to their children’s homes as possible, or as far away as possible so that they can start afresh and live out the lives they’ve always hoped to live.

While it is better not to buy a home purely to be close to your children (keeping in mind that they can relocate at any point in time), it might also be difficult to move too far away if you are a close family who are used to getting together regularly, he says.

Find retirement property for sale around South Africa 

“Buyers should purchase based predominantly on where they would like to live out their years together, perhaps only secondarily factoring in where their children stay.” 

3. Moving before you’re ready

Empty nesters should also avoid rushing the process of relocating, Goslett cautions, as it can be difficult to deal with the loss both of your family and the home in which they grew up.

“What’s more, there is always the possibility that one of your children may need to move back in with you after having attempted living on their own and consequently realising that they aren’t quite as ready to leave the comfort of your home as they initially thought they were.”

Work with a find a 'compassionate' agent

Lastly, Goslett advises that empty nesters find a compassionate and experienced real estate professional when selling their family home.

“Homeowners are often far too subjectively attached to these sorts of properties to do a good job of selling them. There might be things that need to be updated or remodelled in order to make the house more sellable. Homeowners need to trust their agent enough to make these calls on their behalf,” he says.

There is an age-old saying that in life there are two things you can’t escape -death and taxes. While scientific development hasn’t yet found the secret to living forever, there are ways of investing your money so that your tax returns work in your favour.

Proper accounting records need to be kept in order to provide SARS with supporting documents for the deductions claimed. Furthermore, the rental income should be added to any other taxable income the owner may have received.

While taxes can’t be escaped entirely, the money owed to the South African Revenue Service (SARS) can be decreased through wise investment and managed expenditure. Buying a property to rent out is the type of investment that can generate income, grow capital and potentially decrease your dues paid to SARS, says Craig Hutchison, CEO Engel & Völkers Southern Africa.

The benefit of owning an investment property, whether it be in an individual capacity, as a company or in a trust, is that all expenses are deductible from the rental income before tax is calculated. These costs typically include property management fees, municipal rates, levies charged by bodies corporate, repairs and maintenance, insurance premiums and municipal service costs that are paid by the property owner.

Proper accounting records therefore need to be kept in order to provide SARS with supporting documents for the deductions claimed, if you're required to do so. Furthermore, the rental income should be added to any other taxable income the owner may have received. Any amount paid to you in addition to the monthly rental is also subject to income tax. A refundable deposit paid by a tenant is not taxable, provided it is kept separately in a trust account and is not used by you. If it is forfeited by the tenant, says Hutchison, then it is taxable.

Investing in property in a good area where there is a high demand for rental homes will go a long way in making tax returns work in your favour, he says. "Whether investing in property for long-term leasing or if you’re wanting to let out a holiday flat short-term in a high tourist area, do your research and capitalise on something that fits your financial capacity.” 

In terms of a residential property that is buy-to-let, the following expenses are deductible:
- Rental agent’s commission or fees for securing a tenant.

- Advertising costs of marketing the property.

- Levies, municipal rates, insurance fees, water and electricity.

- Interest paid on the home loan, if applicable.

- Cleaning costs, garden services and security.

- Repairs and maintenance costs (excluding improvements to the property, as this would be deducted from capital gains tax).

“As a landlord, deducting the non-capital expenses from your tax return will reduce your taxable income. However, before embarking on your landlord journey, it is advisable to chat to a professional real estate company, your accountant, a financial advisor or a tax specialist, so that you fully understand both the financial implications and tax benefits,” says Hutchison.

“The start of the new financial year is akin to spring - a time to clean up, make new plans, new investments and sharpen your financial acumen for the year ahead. It is also a good time to find that perfect buy-to-rent property.”

With parts of South Africa being ravaged by heavy rain and floods, leading to loss of life and significant damage to properties and vehicles, Auto & General Insurance is urging South Africans to be vigilant and adopt a proactive mindset to avoid disaster.

With parts of South Africa being ravaged by heavy rain and floods, leading to loss of life and significant damage to properties and vehicles, South Africans need to be vigilant and adopt a proactive mindset to avoid disaster.

“What starts out as a couple of drops of rain can very rapidly develop into a very serious and life-threatening situation. South Africans are urged to take practical steps to better protect themselves and to have proper emergency plans in place,” says Ricardo Coetzee, Head of Auto & General Insurance.

Auto & General offers the following tips:
General rules to remember

1. General and regular home maintenance, like checking structures around your house for weak spots, clearing debris from gutters, cutting away dead trees and branches and ensuring adequate drainage of water, is essential and will significantly reduce your risk. Reinforcing vital structures if you live in a rain/flood-prone area is also a good idea.

2. Good vehicle maintenance - make sure your vehicle is in tip-top shape and won’t let you down, even when the proverbial ‘high water’ comes.

3. If you notice that there’s insufficient drainage, or a possible safety hazard due to cracking structures and roads, landslides, rock falls, etc., in a public area, alert the authorities immediately.

4. Always keep an eye on the weather forecast, look out for warnings of heavy rains and avoid danger areas - like roads where drainage is poor - wherever possible.

5. Make sure to have all emergency numbers, including that if your insurer, saved on your phone, or memorised. Make sure that your whole family is thoroughly briefed on what to do and who to call in the event of an emergency.

Heavy rain
6. Make sure that your outdoor furniture and accessories are safely stored or firmly secured and that all gates and doors that need to be locked, are.

7. Heavy rains are often associated with lightning. The power surge of a lightning strike can easily overload most appliances and devices. It’s best to unplug these before the storm arrives.

8. Where possible, park your car under cover and delay travelling until the storm has subsided.

9. If you are caught in a heavy storm and you feel it’s not safe to drive, look for cover, pull over or seek shelter. This could include a covered car park, a petrol station or under a bridge. However, take extreme care when pulling over - put on your hazard lights, and don’t risk your safety or the safety of others by dashing madly for cover. Stay in your car and only leave the safety of your sheltered spot when the storm has passed.

10. Don’t park under trees as there is a danger of falling branches and debris.

Floods
11. It is sensible to purchase your own supply of sandbags, especially if you’re in a flood-prone area, like one close to a river or on a hillside. These can be placed against doorways and low-level vents in times of flooding to help minimise the amount of water that enters your home.

12. Move high-value items to the highest possible floor or shelf if a flood threatens.

13. Turn off electricity and gas supplies if flooding occurs to limit the risk of electrical shock or a fire.

14. If you see warning signs like water seeping through the door or water eating away at your home’s walls and foundations, it’s best to head for higher ground immediately. Do not wait for it to become a life-threatening crisis.

15. Motorists should not attempt to drive in flood conditions. Remember that just 15cm of moving water can knock you off your feet and water just 60cm deep can sweep a vehicle away. You also run the risk of flooding your vehicle’s air intake, which will stall the engine. Generally, if the water is deeper than the bottom of your doors or the bottom third of your wheels, it is not advisable to drive through it.

16. Flash flooding often occurs when rivers flow over low-lying bridges. Avoid crossing bridges or roads next to rivers during heavy rains. If you do get stuck on a flooded road, it’s best to switch to the lowest possible gear and proceed slowly.

17. If you approach a flooded spot at speed, it is advisable to take your foot off the accelerator and let your speed drop gradually. Never use the brakes suddenly because this may cause the car to skid or aquaplane.

18. If your vehicle gets stuck during flooding, or starts to get washed away, rather abandon the vehicle and climb to higher ground. It is dangerous to try and drive out of the water to safety.

“It’s wise to remember that your life and that of your loved ones is worth more than any house or car, so don’t risk it at any cost,” says Coetzee.

“Also ensure that, in the event that disaster does strike, you have adequate insurance in place to cover the complete repair or replacement cost of your house, vehicle and other possessions.”

Eskom has issued steps consumers can take to save electricity as the colder weather grips South Africa.

A thermostat-controlled oil heater no bigger than 2 000W (watt) is the best choice to heat a room of 3 x 3 x 2.5 metres for three hours.

“During the colder months, space heating can be responsible for up to 8% of an average household’s electricity usage. The current constrained electricity network calls for smart electricity usage to help keep the warmth inside and the cold outside,” said the power utility last Wednesday.

Last week the power utility started implementing its ‘Use electricity smartly’ campaign, which aims to reduce electricity the shortage so as to minimise the risk of load shedding.

The power utility said insulated and draught-proofed rooms require 51% less energy to heat.

Eskom has the following tips for the winter period:

1. Use foam tape to seal windows and doors if they do not close properly - in winter, draughts can account for up to 25% of heat loss.

2. Hang curtains to reduce heat transfer.

3. Lay 'door snakes' to stop cold air from entering - aluminium skirts with rubber seals on the outside of doors are also highly effective.

4. Seal cavities in and between bricks with a polyurethane sealant.

5. Seal the chimney if you have one – the best way is to have a damper installed when the chimney is not in use; if not utilised at all, seal it at the top and bottom.

6. Install fire-retardant ceiling insulation – with approximately 40% of heat lost through the roof, ceiling insulation makes your home up to 5% warmer in winter.

7. Only heat the room you are occupying, and use the correct type of heater when you feel the need for extra warmth.

8. A thermostat-controlled fan heater is ideal to quickly heat a room of 3 x 3 x 2.5 metres for one hour.

9. A thermostat-controlled oil heater no bigger than 2 000W (watt) is the best choice to heat the same room for three hours.

10. A thermostat-controlled heater no bigger than 1 000W (watt) is the most energy efficient option to heat it for eight hours.

11. Most gas heaters generate a great amount of heat and do not require electricity at all.

Use 'door snakes' to stop cold air from entering.

The power utility has in recent weeks implemented load shedding as a result of generation capacity.

“Eskom is currently faced with challenges at its power stations, which has led to the need for load shedding over the past few months.

“If consumers can assist us by using electricity smartly, it would help to reduce the need for load shedding, which is a measure used to balance the supply and demand of electricity,” says Eskom acting Group Executive for generation, Andrew Etzinger. – SAnews.gov.za

You already know that we live in a water-stressed country, receiving an annual rainfall of 492mm, while the rest of the earth receives 985mm.

With a prepaid water system consumers can track usage, load credit remotely, and decrease the possibility of bill shock due to leakages or incorrect monitoring.

This is according to Marcus Thulsidas, Director: Business Development, Utility Systems, who says in addition, the WWF (World Wide Fund for Nature) cautions that 98% of South Africa’s water has already been allocated to users, leaving little surplus water to cater for a growing population and increasing demand.

In this context, could it be that prepaid water - like prepaid electricity - is the answer to more sustainable water consumption and management?

“Well, we at Utility Systems believe it is,” says Thulsidas says, and there are five important things that South Africans need to know about installing prepaid water meters:

1. What is ‘prepaid water’?
Prepaid water means that the consumer purchases water credit in the form of a prepaid water token. When entered into the user interface unit (located in the consumer’s home), the token instructs the water management device to allow a certain amount of water through the meter before closing.

Consumers can track usage, load credit remotely, and decrease the possibility of bill shock due to leakages or incorrect monitoring.

A prepaid water meter can also be used to limit water flowing to a particular area. This helps municipalities and property owners to control the amount of water used at certain outputs and prevents wastage in low-income households that can’t afford to pay for excess use of this basic need.

They can make payment in smaller, frequent increments. This prevents their falling into debt, which can compound in a post-paid arrangement.

2. Who can access it?
This is completely dependent on the municipality. So, even if you’re feeling inspired to install a smart water management device to enable prepaid water, you may not be able to - based on where you live or work.

That being said, most municipalities are beginning to embrace prepaid water management technology, so it may just be a waiting game. To find out your eligibility for prepaid water, it’s wise to approach your municipality and ask.

If you have a garden cottage, however, you can add an additional meter and smart water management device to the building to ensure that your tenants don’t rack up huge bills in your name - and then refuse to pay, or leave.

3. How does it affect rental properties and bodies corporate?
The implications for rental properties and bodies corporate are significant.

Prepaid metering reduces admin to a minimum, while removing the risk and frustration of late or non-payment of water bills. This is why housing estates are swiftly moving to prepaid water, as they did with prepaid electricity.

Gone are the days of splitting the entire estate’s water bill by the number of units. Prepaid metering means that users pay for their consumption only.

4. What’s in it for municipalities?
Prepaid systems are cost-effective solutions to sustainable water management in that they have a low cost of acquisition and, by curbing water usage, capital recovery is possible within months.

The systems are also able to distribute water equally, based on free water quotas, water balancing and fluctuating demand.

Aside from their ability to alert municipalities to leaks, prepaid water meters also drastically reduce government’s admin costs. This is because municipalities don’t need to chase bad debts or budget for legal fees on unpaid accounts. Public sector cash flow is immediately improved.

Collecting data from prepaid meters is also more efficient than the manual collection required for post-paid meters. A radio link receiver can be fixed, vehicle-mounted, or carried by municipality personnel.

5. Is prepaid water cheaper?
No - this is a myth. Prepaid and post-paid water cost exactly the same. It is illegal to sell municipal water above the municipal tariff rate declared. That being said, prepaid water gives consumers the opportunity to monitor their consumption and react immediately to possible leaks.

Finally
“The bottom line? Even the simplest smart water management device can provide the tools to track and control water usage. Prepaid water meters are smart tools with the potential to revolutionise water conservation efforts and revenue management worldwide. But it’ll be a while before every South African household is able to benefit from this enormous potential,” says Thulsidas.