Personal-Finance

Money in the letting game

2017-11-14 13:43

Francois Janse van Rensburg, the author of Making Money Through Buy-to-Let, has built a successful property portfolio and now runs a property consulting business to mentor people who want to start investing in property.

His book contains useful information and facts that will help an aspiring property tycoon navigate the world of property investing.

This includes the legal process, finding and managing tenants, as well as applying for finance. He also provides insight into the type of properties that are the easiest to rent out.

My one caveat is that Janse van Rensburg is clearly bullish on property investing and one needs to temper the enthusiasm with some reality.

In his examples, he bases his projections on a rental escalation of 10% a year annum.

Figures from TPN – the credit bureau that provides rental payment profiling and tenant vetting – show that rental escalations are running at about 5%, and you are more likely to expect a rental yield in line with inflation than 10% a year.

In response, Janse van Rensburg says that, in areas where demand is high, one can include escalations as high as 10% a year.

However, that doesn’t deal with the issue of affordability.

While a tenant may agree to a 10% escalation, when their salary is only increasing at 6% or 7% it will be difficult for them to meet the following year’s rental increase.

And if it is a good tenant, you will probably not want to incur the costs related to finding a new tenant, so will end up agreeing to a lower increase.

The current economic conditions in the country remain a risk when looking at Janse van Rensburg’s projections on the time it would take to pay off the property.

Nevertheless, the book remains a good resource for people who want to start buying property. Supplement it with information from TPN at tpn.co.za.

Title: Making Money Through Buy-to-Let in South Africa ... using very little of your own money

Author: Francois Janse van Rensburg

ISBN: 9781776092055

Price: R230 from takealot.com


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November 12 2017