The Signature Rental Approach

PUBLISHED 28 JAN 2017   

30 January 2017

By: Rico de Villiers, Managing Director.


The Signature Team is proud to announce the official opening of our very own rental portfolio. As of Wednesday (01/02/2017) we will be assisting all our valued clients in bridging the immense gap between having property and actually making your property work for you. The logical next step in the after sale service that we aim to provide our clients with. As with everything at Signature Realty we have a fresh and unique approach that we will be launching Wednesday so watch this space.

While doing our research and formulating our approach over the past few months we cam accross a very interesting article written in 2014 by the CEO of PayProp, Louw Liebenberg. We felt strongly that the contents of what he had to say is still very much applicable 3 years later. In his article (link to the full article below) he describes the rental market as a three piece puzzle.

The three factors need to be considered when evaluating the rental market according to Liebenberg is:

  • Positive rental data
  • Negative inflation data
  • Buy-to-let market

When looking at the first two pieces of this puzzle Liebenberg goes on to say:

"Of late, an interesting conundrum has presented itself in the rental market. On the one hand, there is extremely positive rental data on growing average rentals and sustained growth in the level of annual increases. On the other, there is an overwhelming amount of statistics showing how tough life is for consumers, with major increases in the cost of transport, energy, healthcare and food. How do we reconcile these views?"

At its core the answer is but simple economics, supply vs. demand and the costs of renting vs. buying purely out of an affordability viewpoint. In a declining economy the weighted average rental has grown year on year by between 8% and 12% which is currently the sweet-spot for sustainability in this marketplace.

Then there is the final piece of the puzzle:

"According to John Loos of FNB, more than 25% of all buyers in 2004 were buy-to-let investors. As the market ‘crash’ progressed, this number has now dwindled to around 8% of all sales transactions. What this means in practical terms is that there has been a strong and steady decline in the number of properties bought for investment over the past decade. All of this in a housing market where an increasing percentage of citizens are choosing to rent (Standard Bank’s latest estimates are that more than 25% of all households are now renting)."

This data shows us that even though our economy is suffering and affordability is a huge hurdle to overcome, when having an efficient and effective approach to your investment rentals it is easy to turn a pretty decent profit and in turn grow steadily in a declining economy. The catch 22 situation has opened the door to a win-win situation if done correctly.

The Signature Approach

We have formulated a package based approach to assisting our clients with their rentals, these packages will be launched and revealed on Wednesday together with our official launch so like our Facebook page and keep an eye on our website for the updates. As a summary to this we also formulated the customary "Signature Promise" that will look a little something like this:

WE WILL:

  • advise on current market rentals
  • advertise for tenants on Property 24
  • conduct viewings with the prospective tenants and screen your tenants
  • verify the tenants employment
  • acquire a reference for the previous landlord
  • draw up and sign the lease agreement
  • inspect the premises with the tenant and hand over the keys
  • renew lease agreements when they expire
  • negotiate your rental increases
  • send you a monthly statement of earnings
  • conduct an ITC Credit Check (package dependent)
  • assist in the collection of arrears rentals through our partners (package dependent)
  • reconcile payments and proceeds and do the necessary payments on a monthly basis (package dependent)
  • collect all rentals on a monthly basis (package dependent)
  • oversee repairs and maintenance if required (package dependent)

Our fresh approach and industry knowledge perfectly equips us to develop a property management system, tailor made for you, that will not only simplify your life, but will also free up your time so that you can focus on your core business interests. We have the experience and systems in place to ensure the smooth management of your property investment.

We look forward to the official launch on Wednesday and on building a lasting and long-term relationship with you, our valued clients.


Regards

The Signature Team