Why Landlords should not loose good tenants with high rental increases
It's no secret that the current economic climate has impact on property investors and tenants in 2019. We, at Realtors International realised the impact it has had on both parties with our new rentals and renewals. Pay Prop the largest processor of rental payments in South Africa published the average rent in 2018 grew at 4.14% to R7,610, from R7,308 in 2017. The average income, meanwhile, grew to R33,037, from R32,531. Rent-to-income ratio grew to 28.9% in 2018, from 28.0% before. Pay Prop notes that it is generally accepted that rent should equal no more than 30% of a tenant's take-home pay - that is, their salary after tax and other deductions.
The cost and practical implication for securing a new tenant sometimes far out way the benefit of a high rental increase. Factors landlords should consider before increasing a rental
- The current economic climate
- What the rental market in the area is doing
- The quality of the tenant - do they pay in full and on time?
- Are they achieving an acceptable return on investment already?
Our rental team of experts are available to assist you if there are any questions regarding your property portfolio.
Author: Andre Kritzinger