 Good evening and welcome to episode 395 of the Private Property Podcast on my host, Usamandamwa Kumalo. It's the Tuesday edition. I said Wednesday, I feel as though this month certainly, you know, fled by, speed and pie. It is the Tuesday edition of the Private Property Podcast. And if you join us for the first time, welcome to the family. You tune into the only talk show that deals with property on a daily basis right here in South Africa. And to all our regular viewers on Facebook, on YouTube, on Instagram, welcome back. You know how we do. Every single weekday, you and I have an appointment at 7 p.m., where I'm always in conversation with a property expert who helps us make better property decisions. It doesn't matter where you are on your property journey, we're certainly here to make sure that you are well catered for and get the right insight and info to help you along the way. And talking about the right insight and info, we also have a whole host of other great shows every weekday at 8 p.m. that you can tune into. It is a Tuesday, so we'll be bringing you the farming podcast right here at 8 p.m. And you can catch the same show every Thursday at the same time. And on Wednesdays, Estie Carlson brings you the first time home buyer show and Chad takes us through the home shopper's show every Monday and Friday, where he takes us through incredible properties that you can find on www.privateproperty.co.za. Well, those are the great shows every weekday at 8 p.m. Another great thing that I love talking about is of course the great competition that we're running on our Facebook page, where we want to find out from you some of the great property advice inside that you've picked up on while watching the show. And all you have to do is to share your comment of what have been some of the nuggets that you've learned while watching this show. And of course, if we pick your name in the lucky draw, then you get to walk away with 500 grand in cash. All you have to do to claim that prize money is to be watching us live, drop us a text and of course do so before the end of the show. And if we don't get a lucky winner before the end of the show, the money rolls over into the money bag. Yesterday's winner was indeed watching. I think we had what was 2000, 1,500 grand in the money bag here to make use of was watching. So she got to walk away with that, meaning that our money bag is back at 500 grand. So we're certainly looking forward to who the lucky winner is going to be. Well, this evening, I've got our guest, Shanae Stratiwi, who is the CEO at Rent Master. We're going to be looking at top insights on how to navigate the shifting rental markets. But we're going to put a really different spin to it. There's a great article that Shanae wrote that we really want to reflect on a little bit because the reality of being a landlord is very important to understand the numbers side of things. And we can never downplay how important that is, understanding the numbers, being able to use different data sets and different data points in order for you to make better decisions. But there was also a human component when it comes to managing property. And of course, we have different people living in your property. So that's some of what we're going to be reflecting on. And I want to find out from the landlords this evening. It's the tail end of the year. December is literally in a couple of hours time. How has your landlord journey been like this past year? We've seen so many lows. I think some people have seen some highs, but there's certainly been quite a number of lows. What has that landlord journey been like for you this year? Do you share with us down here below? Absolutely looking forward to hearing some of your insights. Shanae, good evening and thank you so much for joining us on the show. Thank you so much for having me again, Zama. I really enjoyed joining you and your audience and sharing some of our insights. So yeah, let's get to it. As you see, there's a whole human element to what we deal with. And today I'm super keen to share some of that because usually I'm giving you data point after data point. So there's some fascinating data points so we can share some of those. But I'm keen to hear from your landlords too. And I think let's first start with what and I was asking the landlords how this year has been for them as landlords, certainly keen from you what the data has been telling us around how landlords have been doing or how their portfolios have been performing in this specific year because I think it's been quite an intense year. It's been quite a tumultuous year in different contexts and as we really slowly start reflecting on the year that was and of course gearing up for the upcoming year. What have been some of the trends that you've spotted when it comes to the rental market and the different regions that we've got? So I certainly can't ignore where we started from 2020 because 2020 with COVID and hard lockdown, we have to have a look at that and see what it did to our economy, what it did to our rental collections and we had an all-time low and we must understand that that's not a quick recovery in terms of the economics of things. So when we have a look at double income homes going to single income homes, we're looking at how are people recovering in terms of their affordability? How are they recovering in terms of being able to pay their rental or catch up on their date? And we certainly see a decline in consumers' credit profile. How are institutions such as banks and rental companies like for instance, in-master with their orders, how are we helping these consumers who fell onto hard times rehabilitate themselves? So that is the trend that we have to bring into 2021. What are we doing as landlords, as property owners, as agents, as institutions in order to get consumers back on the bandwagon? Because they didn't have a choice about it. Let's face it, many people didn't have a choice about the financial quandary that they found themselves in. So that is what we look at in 2021. We see a recovery in the payment profile behavior, meaning how many people are paying on time. That has been a certain recovery, sitting at about 83% on a national average. But what was more interesting to me is that with the lowering of the interest rates, you had first time homeowners. Meaning those tenants that were good tenants now are in a position to buy their first homes because of the drop in the interest rates. Now I'm looking forward to 2020 to see what does monetary policy and what do our interest rates say for these individuals that just got to own their first properties and are they going to re-enter the rental market? But landlords were left with high vacancies. So in this last quarter, I've just read from PP and Creative Bureau, their vacancy survey and you know what amazing data they have. And what they are telling us is that there is a slight decrease in this vacancy rate, showing a marginal improvement. And what we're seeing is we're seeing very low or little or zero escalations in rental rates. So yeah, that's pretty much the trend from this year. And you know what Shana, as when I think about some of the trends that we've seen this year, one of your other unfortunate trends, and it speaks to the article that you had also written, was that you also saw a lot of separation. Divorce rates were significantly higher than in other months, and not just for the South African context, but we also saw it in other parts of the world where you know, married couples are divorcing or certainly getting separated. And we know that something like that has an effect for both the landlord and the tenant. And I think it's one of those things that we don't usually think about even when we enter into for instance a lease agreement with our partners. We don't really think what would happen if we break up. Because you think look it's a year-long lease you're probably going to you know, last that long. Or if you are of course a landlord and perhaps you've bought that property with your partner, you also don't necessarily probably plan for if you're going to separate with your partner. And that's what I want you to look at. I think first let's start on the owner side, because that's you know, that's the more admin heavy part because you would be married to somebody. You know, what are the implications, especially of course as it relates to property when owners who are landlords of a particular property, they are separating and now need to deal with the admin of the property or properties that they essentially manage. Yes, so you're very right. Now the sweet spot we're lying and during this last year we've encountered and have to have a lot of difficult conversations. Meaning the last thing you want to be dealing with in a you know relationship breakup and in today's world we have a lot of individuals that are cohabiting. Now if we look at a landlord perspective, you've got individuals that are going into marriages or cohabiting, they co-own properties. If you're married, clearly whether you're married in community of property or out of community of property would have influenced how you contracted with your tenant. So when you are out of community of property and your property so happens to be part of your assets, that wouldn't necessarily be affected when you are changing your marital or your relationship status. As long as the contract that you've got in place is with the two correct contractual parties and I think that's what we ultimately want to get to. What we ultimately, the principle is that you want to enforce a contract and at the end of the day you start off with good intention. You need to understand who are the contracting parties and you need to plan for the fact that those contracts have to reflect who the parties are accurately should you need to take your action. So at any point in time if there's a change in those contracting parties you need to change the contract to reflect them. I'll give you a very, very sad situation. What happens if during COVID times the property owner passes? It's a reality that's happened. What happens if that property falls into a later state? Who is the executor? Who is giving authority on whether the property can be rented out and to which bank account in the estate that has to be declared is the money going to because that needs to be given to any agent and we need to make sure that the tenant is aware of that changing circumstances. I think those are such important things that we need to always consider and as you said I think one of the unfortunate things during COVID is that people have also passed away. Never mind a couple separating by landlords we've seen landlords pass away and so many things have unfortunately gone haywire because of that. There have been instances that we've also seen on social media with tenants saying my landlord passed away and their partner suddenly wants a place or somebody said I need to move out within a month and yet you're only four months into a year long lease and people just wanting some kind of help to best manage that. I want us to go for a quick break, see who the lucky winner of the competition that we're running is and when we come back we'll be taking your questions and comments this evening as we look at the insights on navigating shifting rental markets and of course also understanding the human component of being a landlord and of course being a tenant and how you can best manage those situations because if anything COVID has taught us is that there's so many other things that happen that we hadn't quite thought of but there are ways that you can best manage that. But in the meantime let's have a look at who the lucky winner of the 500 Reins in cash is going to be. And that lucky winner this evening is Fatima Sadian 500 Reins up for grabs for you this evening. Do make sure that you drop us a text before the end of the show in order to claim your price and if you want to be just like Fatima all you have to do is to enter our competition on the Facebook page it's the pinned post on the Facebook page we have over 6,000 comments the more you enter the more you comment the more you stand a chance of walking away with that cash price and of course you have to be watching us live in order to claim that money. Going back to our conversation looking at top insights and how to navigate the shifting rental markets I'm joined by Shanice Trethewey who's a CEO at Rentmaster and taking your questions and comments on our Facebook page we've got Christine Dachawa asking good evening please advise if there's a rental gorge within an area or a landlord can increase according to their bond then it differs to the very next house or flat and I love this question Shanice essentially it's how does a landlord set the rental price are you setting it based on you know your bond installment and if you know it ends up having the price point being significantly higher than the neighbors how and we find this particular challenge with new landlords who don't quite know you know how the market typically works and think that the way that you set the rental amount is by looking at what your either your bond is going to be or what the overall expense is going to be and thinking well that's how I'm going to set my rental how do we go about setting that rental price point sure I mean I've had this question so many times and I find it fascinating because I really do want to give landlords a formula but the way I see setting your rental right is by understanding all of the different components so let's start in a simple way and say all right you've got a bond in property so you need to understand what numbers and what payments do you need to make in order to not get yourself into trouble that is a starting point that is what I call in my world a some cost whether you get that in return or not that's going to be going out your bank account your bond payment needs to be made your property agent needs to be paid your managing agent needs to be paid your lights and water so you need to understand what are all of those subsequent to that you then going to go and like for instance at Grandmaster what we do for our landlords if we we get a property report and tpn credit bureau provides a property report and based on rental data in your area as well as surfing the net seeing what other people are advertising what their properties look like you can start seeing what the rental index is the rental index is this is the average rental and this is the amount of vacancies and how much competition you've got now you've got these two sides and so the negotiation starts you present it and put it out there you see what response you get and then based on that you start adjusting I just have to say to landlords that you need to be aware of three things one you need to be aware of interest rates and where they go in because your bond payment is going to be affected by that and secondly inflation you need to understand what's happening because costs if they rise are going to affect what that profit is so you can't uprise yourself but please make sure you've got a margin that you can work with a buffer and I think that's such an important one because I think when we look at understanding the numbers understanding what you can afford but also I think you know sometimes it actually goes to the first starting point about what the intention of that property is are you buying it for capital appreciation are you buying it for cash flow do you understand the difference of the two do you understand how the numbers have to make sense you know if you choose either one of those particular you know strategies if you're looking for instance to buy and hold and to rent out because that also then informs certain things I know some landlords who with certain properties when they're buying for you know capital appreciation would argue that look I'm okay with topping up certain expenses of a property in the beginning stages because I'm taking a long-term view of this property and because I know that in you know five seven ten years time the value would have appreciated and that's what I want to unlock you know in the event that I sell it or perhaps refinance it in order to access that equity or if you're then looking at you know buying a property for cash flow you're very clear that you're not interested in in paying any kind of amount you know the property needs to be able to more than pay itself you want to be able to make x amount of money when you of course have that particular property so understanding those dynamics you know certainly helps I know that some people buy a property to say they want to eventually give it to their children or this is where their child perhaps will live when they're in velocity so for now it just needs to pay for itself it doesn't have to make any money but it's just that thing that they want to be able to give to their kids in the future so I think it's very important and that's why I love that question because it has it has you thinking through as a new time you know landlord or certainly an aspiring landlord some of the the fundamentals when you have that particular when you're thinking of a property why you want to actually buy it and and and what needs to be triggered in the event where you're buying it for you know capital appreciation or to potentially give to your children and that's something that's so important so thank you very much there Christine for that question now so now we spoke about what happens when you know a couple who were who are landlords of a particular property in the event that they separate and and what would typically happen but then what happens on the flip side when you now have tenants who co-habitated or perhaps who even married living together and they're breaking up and this could have been you know at least agreement that they both co-signed as opposed to just in the one person's name so they're both co-signing and they now want to separate what needs to happen what does the tenant need to do in terms of notifying the landlord what does the landlord need to do in terms of either changing the nature of the lease agreement so it does become somewhat complicated in the scenes of when you're contracting with two individuals and they are going on to the contract from a landlord perspective firstly you need to understand who is on that country at the end of the day the principle still stands there should be an agreement in place that you should be able to enforce at the end of the day we're dealing with humans a conversation is the place that we start instead of being obstructive or not answering landlords are overwhelmed just as tenants are because in the COVID environment everyone's facing pressures so look we must just be human about it so let's start at a place that we can all reference and that is the contract at the end of the day we want to know that that is reflective of what is happening on the property so when we have a couple that's co-habiting who signed it what we've seen in the red master environment is that people bring us a couple and one of the partners has signed whereas they're both intending to share the rental because they're doing each doing their part in actual fact both of them are liable both of them are over 18 and it would be right for both of them to sign that lease agreement and that's what I say to all of our landlords make sure anyone that is in that environment that is over 18 and a contracting party should be signing that lease agreement now in the event that that changes we need to understand two things we need to have the notice from the leaving party and we need to evaluate the financial impact what happens if the if the tenant that's left over reasonably cannot afford your rent that's an awkward question but it's one that needs to take place it's one that you need to ask and it's one that green master asks of the tenants when these changes happen we need to rerun the credit check based on the changing circumstances you know we go to doctors and at that point he's not going to look at the blood test from six months ago he needs to make a call on what's happening right now and and we need to do the same thing so when you are specialist in it you're going to look at what's going to affect it can that person afford it and are you going to be prepared to re-contract with them based on the fact that they have that profile and they are are they going to honor their obligation a tenant needs to give that notice a landlord an agent if you've got a property management agent needs to change the legal documentation and tenants must be aware that if your partner moves out you don't change the lease agreement the partner that's left could be on a lease document and who are people going to go after unfortunately landlord you'll have to take action against the person who left the relationship in the property and and that's that is an unfortunate legal situation so let's avoid it and I think you know it's such an important one to note because uh the the the what are the realities that you know is that when you know a breakup is is happening uh regardless of the nature of the breakup uh and and of course you know lease agreement is is affected you sometimes don't stop to alert your landlord especially in the event where you can afford the place in the meantime right so let's assume in the moment you can actually afford the place so you're not under financial strain I think it would be a significantly different thing when you know you cannot afford it on your own your landlord is going to be one of the people that you know you have to think about perhaps notify if the lease agreement has to be terminated and and I want us to talk a little bit about that you know it's in the context where you your partner and you are separating and certainly no longer going to be living under the same roof and one party the one whoever is staying can unfortunately not afford to stay in that particular apartment because of you know the rental and them paying that amount of loan and they now want to terminate the lease agreement and it would be terminating it prior to when the lease agreement is meant to actually end uh what what happens in those situations is we tend to find a lot of times you know tenants just struggling to we'll call it get out of the lease because that's the you know that those are the words that they use that they can't get out of the lease or they need to find somebody else to take over their lease uh not knowing that you can give notice there may be penalties and sometimes you may rather you know have a conversation with your landlord about that uh perhaps take us through the kinds of options that the tenant may have uh that they can you know have that they effectively cannot afford your place and they're letting you know as soon as possible about it yeah so that is a very sensitive topic and you know what we alluded to earlier is that owning property is understanding data understanding the money but the magical eyes and being able to bring that middle ground between the human element and understanding the data and finding a way to negotiate and reduce it to writing for being fairly representative of both parties so and this is why lease agreements are so important right this is why for instance we've got things like the tp and d spec which red master bases the lease on and that says the landlord has rights they have a right to cancel the lease early and that is based on the fact that they are going to occupy it or sell it um they've got to have those reasons and a tenant can also cancel the lease and the terms of that cancellation is captured in the lease agreement they need to give so many days notice if you've got a fixed term you need to give you 30 days notice if you've got a month to month lease you need to give seven days or however whatever is stipulated and you've agreed on now in these situations we first evaluate how far from the end of the lease is that because that's going to it's going to determine how penalized or how how the landlord's impacted if you're two months into a 12-month lease he had anticipated having someone there for another 10 months so the likelihood is that he's going to say well i've got a i've got a levier one month penalty and i can say that i'm going to go ahead for advertising and you need to to take that cost on because i just finished going through all of that now in those cases what happens is that's when tenants go well if i find you someone then i can avoid that penalty and i can avoid the advertising cost okay that is part of the fairness of the contract if you are a month away from the end of a 12-month contract it becomes a more difficult negotiation because what happens is that you still have to give you 30 days but it does mean that you the court see it as how fair are you in putting such a vast or such a big or heavy penalty on the tenant when they would have exited a month from there okay and you would have had to advertise so these are the sensitive and subtleties that you need to go into understanding it however the tenant can cancel they will be liable for penalties and that is a point of negotiation and then they exit the property and unfortunately tenants need to understand that lowered affordability means they need to make and come to terms with their change in lifestyle and denying it is only going to get them into financial trouble and that is a big reality that a lot of consumers have had to face in the last two years changing their lifestyles in order to afford rent which is an obligatory payment we've got a last question that i'm going to squeeze in before we wrap up the show coming through from ulu ni sibani asking do you have to have a good credit record to enter into a lease agreement so that is a credit agreement a credit profile is showing your risk profile it means it's showing how well you pay so as i said the reasons why you may have a good or poor credit record is based on how you honored your payments good intention is one thing but what i say to all tenants or consumers you need to be very careful about how you spend your money and honor your obligations because when people look at you on a piece of paper they're going to assess you based on that you can't be denied for instance um you know you can't be denied saying i can't apply for property because i have a poor credit record but the landlord has a right to understand whether they are okay with your payment profile behavior to believe that you will pay it so from that perspective you need to be very aware that it contributes to an individual's view of your risk profile and they have a right to decline your application to a property and you need to show them that you can rehabilitate yourself and so for instance something like doing your rental via debit order contributes to your credit profile and what it means is over time you can show that you rehabilitating yourself or you are honoring it and then you can get to a point of a better profile and therefore seek better properties unfortunately it is a risk a question of risk now as we as we wrap up any final you know comments to both landlords and tenants when it comes to uh you know better tenant landlord relations especially the context of any significant changes to either one of them that could of course affect how they are a landlord or their ability to continue being a tenant in a particular property at this point in time what i've experienced is that no one's about being emotional we've all faced so much stress in the past two years and we would have responded in a very rational way we are acting out of desperation out of needing recovery of need out of financial pressure and we need to be very measured in the way we interact if you feel that you cannot interact you know you've got agents you've got people that have an impartiality and you need to understand that at the end of the day talking about it actually reducing it to documents and making sure that you come to a fair solution is what is going to be in the best interest of you as a landlord because you also are going to have to face consequences if you do unfair practice similarly with a tenant you've got a responsibility to your landlord to speak and respect what you contracted to do so the point is let's understand stick back be measured in our approach it is tough everywhere and we just need to understand the humanity and be fair and that's where we're going to leave it at this evening Shanice thank you so much for joining us on the show thank you so much for having me and that is Shanice Tredaway who's a CEO at rent master wrapping up the Tuesday edition of the private property podcast and unfortunately Fatima Sadian has not raised her hand to claim that 500 rounds so we're going to have a roll over tomorrow a thousand rounds is up for grabs I do have that if you have entered uh you're certainly going to be watching if you haven't already do go and enter and of course you've already entered also you know enter more in order for you to increase your odds at winning well that's it for myself as I'm under one tomorrow this evening on the private property podcast and of course I will be hand over the reins to Umbali Norco who's coming to your screens at 8 p.m on the thumbing podcast and of course second all things agriculture until then hope you stay home and stay safe