 There's a huge difference in terms of residential property and commercial property. Do you mind just taking us through some of these fundamental differences in terms of how they look and if one is looking at even buying commercial property to let out, what are some of those things that are unique to that space and that they may just need to be aware of before they do something like that? Good evening and welcome to the Private Property podcast right here on our Private Property Facebook page. It's 7pm and it is a weekday so that means that we are sitting you down and telling you everything and everything property. So if you are interested in what we are about to talk about today, I am sure that you're going to be interested because we are talking tips to buy to let and have success amid the rental boom or the property rental boom currently that is happening in the market and I'm joined by Megan Ladbrook who is the general manager at the only realty group. So do stick around for the conversation tonight. It's going to be a very insightful one. So if you are also joining us for the first time, a very warm welcome to you. If you're joining us on the Twitter spaces, thank you so much for coming through. Hopefully you'll stay to the end of the conversation. It's going to be a really good one especially if you are thinking of going into the buy to let space. Maybe you want to buy an apartment and let it out or you are already in that space. Maybe you are going to learn something tonight that will help you maximise that investment. Megan, thank you so much for joining us and how are you doing tonight? It's a pleasure. I'm really happy to be here. Always love doing private property podcasts and Facebook lives. They are awesome. Thank you so much. Let's just jump right in and start talking buy to let and the success rates that you guys are seeing or in your experience have been seeing. Do you think that this is still a lucrative investment for a property investor to go into or do you think that maybe they should start shifting their focus somewhere else? Well, you're firstly asking ex-rental agent. So obviously rentals are our focus. I'm always going to say that it's a good investment. One of the key things is if you don't start investing now, it's never going to be a good time. So all those things are very different at the moment and then obviously post COVID times have been very interesting. We have seen quite a shift actually at the moment obviously the interest rates just gone up again. So people are now all concerned and worried about what it's going to be and what it's going to mean for their finances. So yeah, at the moment I suppose everything's really up in the air for people who aren't I suppose seasoned property investors, but I just want to say they shouldn't panic. It's actually a really good time to get into property investment. We're going to see a lot more people looking to rent versus to buy because they're just going to be concerned their own finances and affordability might not lend towards buying at the moment. So yeah, I think we're going to see an influx of really good tenants. So buy to let is always a good place to be. No, definitely. And if someone is already in this space and you're already a landlord, you already have tenants maybe that are occupying one of your properties or maybe you've got vacant properties and you're looking to let them out. What would you say in terms of this person making this mode of investment lucrative? One of those things that they could do or maybe marketing strategies or whatever they could actually adopt now, in order for them to increase the profits that they're getting and possibly let out those places that are currently vacant. So one of the key things would be to run it like a business. I think a lot of people go into property and they're very good business people and then it comes to property and I think they can invest in it. They get a little bit too emotionally attached to the property or to their tenants and sometimes it leads to them making decisions which they wouldn't normally make in a day to day business situation. So it's really important to understand what your monthly costs are, exactly what you need to cover and build in a bit of a buffer there for items like maintenance and ongoing improvements and upkeep which will make your property more attractive to tenants and definitely will play a big role in making sure that it's not vacant. So that would be my biggest tip. If you think of something as a business and you take out the emotion, it helps you make more rational decisions when it comes to what's going to be profitable and what's not going to be profitable. Yeah and you know you said something at the beginning that with COVID and the different things that are happening in the industry, there's so many interesting things that are coming up and that are changing the way your business is being done. Do you mind just going through some of those things and some of the trends that you have picked up and if there are any challenges maybe let's start focusing on those to say what are the challenges that are coming out from the current business of the day and how can one also really try as much as possible to circumvent them and make sure that they don't do their business in. So one of the most interesting trends I think just holistically in any industry is the rise of working from home. So if you apply that into our space it's seen people moving from different areas looking more towards obviously there's been a huge shift towards immigration and living in an area where you want to live versus where you have to live for work. So that's been a huge shift and when you look at those kinds of trends, one of the biggest things that impacts people is the ability to work from home. So things like fiber and wi-fi and those kinds of things have become quite attractive to people as tenants. So we've seen a lot of land was actually making a huge effort to also make their properties work from home friendly and by doing that they've been being able to attract a larger number of potential tenants. So you know that's been a very interesting space to be in. We've seen people make decisions purely on whether they have the ability to to have fiber in a property or not. So it's a huge huge part of I think our day-to-day life now and even people who are going back into the property market as a as a tenant versus somebody who's been owning their own home and we've seen a lot of that with the same immigration happening. We have seen people who have been property owners now looking to rent in the sort of new area of choice of living until they get a feel for the space and they want to commit. So I mean a lot of that is happening at the moment as well. So the ability to understand in your environment and make sure that that they can carry on their day-to-day life has been a huge trend. One of those challenges that people they need to sort of understand is that it's named quite a competitive space because there are a lot of tenants that are looking for properties and especially in Hattang coastal areas we've also seen quite an uptick in places like in Kumballanga. So more of the lifestyle areas and because there's an influx of tenants and the competition for a landlord to find a good tenant is a little bit fierce. So making sure that your property takes all of the boxes for your target market I think is probably the biggest challenge. And you know for letting or for buying to let there's a huge difference and this just comes from a Lingmans looking at it. There's a huge difference in terms of residential property and commercial property. Do you mind just taking us through some of these fundamental differences in terms of how they look and if one is looking at even buying commercial property to let out what are some of those things that are unique to that space and that they may just need to be aware of before they do something like that? So I'm not an expert in commercial but it's important to understand that the challenges are actually very similar. In the commercial space we've seen obviously a lot of downsizing from large offices to smaller offices into more flexible spaces. So if I was going to be looking at a buy to let investment in a commercial space I would definitely pay attention to those trends. Something that is possibly a little bit more flexible for your tenants so they can grow with the property as their business grows or grows back into being one where there's full-time employees on site. So flexibility I think is one of the biggest needs in the commercial space and just you know from from a landlord's perspective making sure again that the property is very conducive to having people on site. A lot of businesses are not going to want to invest in a big space if there's not enough parking for instance for employees. So parking is a sort of a big challenge when it comes to commercial spaces. Again we've seen people that have opted not to buy or rent a commercial space purely based on the parking and the ability for the employees to be sort of on site and have somebody to park somewhere safe to park. Cape Town again that's quite a parking is quite a contentious issue. So from a commercial perspective that's what I would look for. Obviously the needs of your clients have to come first and foremost so again understanding the space that you're in what kind of businesses are would be your potential clients if you're a property investor you're providing a service which is the property. So those people you've got to make sure that if you're in an area where maybe small office parks are very much needed that's what you should be investing in. If you're in a space where there's a great need for commercial large warehouses that's what you should be investing in. So I think a little bit of research will go a long way if that's your intention to get into the commercial space but similarly also in residential researching what's needed and where you are and where you're looking to invest will tailor make what you're buying. If you know the need is the greatest in a specific price range or type of property you'll be able to to make sure that if you're investing in those types of properties you're probably going to have more demand and more demand is obviously better for you. You know just before in the recent past rather we've been hearing that it's a it's a buyer's market and if you want to buy property this is the best time because the interest rates are low and you know this was before today. Do you perceive that now this this this is going to change the narrative a bit? I know you said earlier that there's still a good time to buy property but are we going to maybe or are we predicting that more people are now going to stop buying property and you know seeing a little bit of this impacting the letting market because previously people were now leaving rental rental property to go and buy houses and for them to stay in because they they were just generally they are just people who were letters you know there were there were tenants rather and now I want to be home owners. Do we now see this market now fluctuating and maybe also just really creating that the market being volatile? Yeah I definitely think we're going to see that. What's quite exciting though is you know obviously when the interest rates were very very low it was great advertising you know lowest you know for however many years and I think people got very caught up into it and didn't really think that you know it would be going up so soon which obviously you know is something that you know gets caught up in the optimism of being of a property owner and so we did see a lot of people take that step from being a tenant into to buying their own homes and first time buyers so it was it was very interesting and a lot of those people have probably overextended themselves and probably can't actually accommodate you know another one or two interest rate increases besides that you know there's municipal increases that are coming into play so we're anticipating seeing a lot more people that are purchasing to let versus purchasing to live in the property themselves so from that aspect I think you know that there's going to be a shift there. We're also seeing a lot more people choosing to be tenants even if they can afford to buy and we see a lot more people choosing that because obviously owning a home there's costs involved with that which you can limit if you're a tenant you know the maintenance and upkeep and improvements also afford to the landlord's responsibility so we are seeing a lot more of that so yeah I agree with you I think you know we always in for interesting times but as I said at the beginning you know it's a cliche for a reason it's always it's always a good time to buy especially if you're going to focus on on letting the property at the moment. Thank you so much for that and if you just joined us we are talking tips for buy to let success amidst the property boom and I'm sitting with Megan who is from who's the general manager at Only Reality Group and we're really talking about how you can maximize your investment if you are somebody who's already a property investor you are landlords they are tenants that are living in your property currently how can you maximize this investment you know and how can and if you're even sitting with vacant properties how can you ensure that they are led and you know you're making money from them and grow your ultimate property portfolio by getting more getting more properties and of course letting those out. I'll take the poll for the date now and one of the questions that we asked was that would you consider buying a property to rent it out and the first answer that we gave you the first option was was that I'm already doing so two yes I would or three I wouldn't and one of our regulars came in guns blazing and she Martha Shinganga said she is at one she's already doing so and of course that's because she is a regular here at the private property family so she has gotten so much insight and she's probably handling or managing that property like a boss. Kenneth Mochella says number two he would definitely do that and would be a good way to have extra income like to pose a question or a comment please do send those through right now on our social media pages and we will try and ensure that we get those questions answered and I had some come through earlier and someone is asking with the with the interest rate rising should I expect a hike in my in my rent if my should I expect a hike in my rent if my landlord if my landlord's bond price has increased should I expect oh yeah they're asking the same thing should I expect a rise a rise in their rent because of the interest rate rising up. So it does it does firstly depend on your rental contract if you're in a contract for a fixed term and you've got a rental that's set at a specific amount and then for the at least the remainder of your rental contract you sort of locked into that price and you should be fine unless there's a provision for your landlord increasing the rent midterm if there's any expenses that have have sort of a arisen like an interest rate hike or maybe a levy increase and so on that it really depends on what your rental contract says and what situation you're in in general though you know we are expecting landlords to try and recover the cost of the bond increase maybe at the next renewal and if they in that cycle so you could be faced with a situation where your landlord is going to try and increase the rental to make sure that they're still making their you know coming out comfortably whether that's breaking even or making a small profit on the property you know they need to sort of maintain that so we do expect people to sort of increase their expectations for a rental increase accordingly and the flip side of that you know if you if you're sitting in a situation where you've got an excellent tenant I'd always advise to try and keep that tenant and be negotiable with your tenant make sure that you're accommodating towards their needs it's not always the easiest to find a replacement tenant and you might end up with a short vacancy which obviously will cost you maybe far more than what you're actually trying to achieve by increasing the rental sure no definitely because you don't want to lose that that tenant and then sit with an empty apartment yeah having having a good tenant that the the key to to success if you're a buy-to-let investor so you know keeping a really good tenant as you are prize number one and I think later on just before we round up we will talk a little bit in terms of how a landlord can can find a good tenant and if it's good to even have estate agents but before before I jump in on that let me take this this question that also came in from social media where someone is asking which is better to buy is it a standalone house or a sectional title in terms of letting out and managing any in your advice what would you say sure that's a that's a really difficult question to answer and it's really area dependence different areas lend themselves to different types of property in terms of demand and so that would be something that I would say check to your local estate agents but and get an understanding from them what the demand is really like obviously a standalone house and you wouldn't have the cost of levies but then there's obviously maybe additional costs that you wouldn't have to factor in if you had a sectional title property related to maybe security so there's there's really different different pros and different cons for both and neither is better again it depends on what's the need in your area the greatest need you know could be student accommodation or could be flats it could be houses for and actually Cape Town and you know I'm in Blobe we're seeing such an influx of people coming from Khartin that are looking for lifestyle and they're all looking for houses and the majority of them are looking for houses family houses so it really depends on your on your area I would definitely check to a local estate agent and and get their insights sure and talking about estate agents right no definitely and thank you so much for that and I really hope that someone who's watching who's a property investor really takes that advice because that is how we harbor those good relationships and ensure that we are able to really grow our investments while we also just also really giving back because you know when you are in this kind of of business where you are giving people accommodation it's not just also a financial and monetary transaction you are legit giving people a roof over their heads so it's important for you to know how how those relationships can be can be made to work someone is asking my landlord has worked the levies the the estate levies into my rent is this lawful and is it lawful for them to work it into your rent and again I'm going to say it depends on what your contract says and a lot of contracts make provision for the levies or the rental and so if the levy goes up that does make provision for the landlord to increase the rent accordingly and I would have to say I would need to understand how they've worked it into the rent and a lot of people do so if you're saying for me as a property investor and my bond is 10,000 rand the levies are 2,000 rand so I'm going to need to rent it up for 14,000 rand to be in sort of a good position and you could also say that that's working it into the rent and so yeah I think that's something and be happy to have a look at it if the viewer wants to maybe message me or email me and I'm happy to have a look at it and sort of unpack it a little bit for them I don't want to answer without seeing you know the actual contract and situation that they're in yeah no thank you so much for that and I'm guessing that that's that's the nature of it it was just really worked into the price of the house and now and that's what they're paying and you know with with people who live in estates they shake such information you know maybe randomly someone comes onto private property to see how much the houses or even the apartment is going for yeah and I mean it's one of the biggest it's one of the biggest tools that people use and you know they'll go onto property they'll see what's available in the area they'll see what other people are paying and they'll use that as a negotiation tool with their landlords so you know it's really important that you educate yourself and see what is available out there make sure you as a tenant in a buy flat property and are actually making the right decision for yourself and then maybe the property that you in offers you all of the amenities that you need at the price that's that's fair yeah no definitely thank you so much for that and thank you so much for taking our time to talk to us tonight really enjoyed the conversation tonight and I'm sure that somebody who's watching who is who's a property investor has gotten such good information for them to be able to make good decisions in order to grow their portfolio thank you so much and have a good night no it's a pleasure thanks a lot for having me bye and that is how we get to the end of our conversation tonight where we were talking by buying to let property and how you taught to be successful tips on how you can be successful in how the property market currently looks and ensuring that you are able to let out that property you know have have good relationships with your tenant so your property never sits vacant thank you so much for joining us tonight we will see you next time right here on the private property podcast 7 p.m on a weekday that this is where you should be this right here is where you should be seeing my face and we are talking anything and everything property thank you and have a great night