Is buying a property to rent out a good investment?

Buying a property to rent out can be a good investment, particularly in areas with strong and consistent rental demand. However, property investors should carefully research the market and plan before making an investment decision.

What should I consider when choosing a rental property?

When selecting a rental property, it is important to research the area, assess rental demand, understand average rental prices and evaluate the types of rental properties that are most popular in the market.

How do I find a good tenant for my rental property?

Landlords should perform credit checks, conduct background checks, obtain references from previous landlords and consider how the tenant intends to use the property before signing a lease agreement.

Should I use a rental agency or manage my property myself?

Using a rental agency can provide assistance with lease agreements, rent collection, tenant communication, inspections and legal matters. Self-managing a property can save agent fees but requires more time, effort and knowledge of rental laws.

What services can a property management agency provide?

Property management agencies can assist with tenant screening, lease negotiations, rent collection, tenant communication, property inspections and initiating legal action when required.

What responsibilities do landlords have when managing a property themselves?

Self-managing landlords are responsible for creating and managing lease agreements, communicating with tenants, collecting rent, conducting inspections and arranging any legal support that may be required.

What are TPN Tenant Services?

TPN Tenant Services is a tenant credit bureau that offers tools and services such as tenant credit checks, lease agreement resources, tenant invoicing and property management solutions to support landlords.

Why is tenant screening important?

Tenant screening helps landlords identify reliable tenants, reduce potential rental risks and improve the likelihood of receiving rental payments on time while protecting their investment property.

Can Absa help finance an investment property?

Yes. Absa offers home loan solutions for investment properties and provides access to resources and services that can assist property investors in managing their rental investments.

What should I do before investing in a rental property?

Before investing in a rental property, you should research the market, evaluate rental demand, understand the costs involved, screen potential tenants carefully and ensure you have the right tools and resources to manage your investment successfully.

Benefits of renting 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 management agency
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 to any legal actions.
TPN tenant services
How we can help with your investment property

Choose to finance your rental property with us and get access to some great property management services.

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.