"Interest rates might have come down recently, but purchasing property is still out of reach for the majority of people entering the job market. This is why renting remains the most popular way for most people to enter the property market. However, while there may be less red tape than buying a home outright, there are still plenty of considerations to keep in mind," says Gerhard Kotzé, CEO of the RealNet property group.
With that in mind, here's what you need to consider:
How to Qualify: To qualify for a rental property, ensure the monthly rent does not exceed one-third of your net income and that you have a steady source of income. Additionally, landlords typically require a credit check, so maintaining a solid credit score is essential.
Deposit: A deposit equivalent to two months' rent is often required upfront, along with the first month's rent. Landlords are obligated to invest the deposit in an interest-bearing account for your benefit. When the lease ends, the deposit, along with any accrued interest, must be returned to you, minus the cost of any outstanding rent or damage repairs.
Other Costs: Beyond the deposit and monthly rent, additional costs may include water, electricity, and other utilities if they are not included in the rent. You may also need to budget for installations like fiber internet and pay fees for the credit check and lease agreement drafting.
Inspections: Both incoming and outgoing inspections are essential. These should be conducted and signed by both the landlord and tenant to document the property's condition and identify any tenant-caused damages.
Lease Agreement: To protect both you and the landlord, a lease agreement must be in place. It should include details about the property, monthly rent, deposit, property use conditions, breach clauses, and tenant obligations.
Leaving Before Your Lease Ends: Under the Consumer Protection Act, tenants can cancel a lease by giving 20 business days' notice at any time. However, landlords are entitled to charge a reasonable cancellation fee, which should be outlined in the lease agreement.
Moving into your first rental property is an exciting milestone, but it's in your best interest to gather as much information as possible. Speak to a trusted local Property Practitioner to guide you through the process and help you make informed decisions.
