According to recent reports, the South African residential rent market has an estimated 1.3 million landlords managing their own properties.
“Majority of what we call micro landlords are investors with less than ten properties in their portfolio,” Michelle Dickens, managing director at TPN told CNBC Africa.
“With less than ten properties in your portfolio, you can imagine that you could do the job yourself especially if you have been sold the passive income dream,” added Dickens.
She further explained that, the current market was the landlord’s market as interests rates were low, with quality tenants and stock shortages.
“There are a lot of tenants with limited properties and this is making landlords enjoy the privilege of choosing and dropping tenants,” Dickens added.
However, Dickens warned that estate agents were still relevant considering uncertain markets conditions and tenant behaviour.
“Estate agents unlike landlords follow through the process without emotions though at the end of the day, the landlord is responsible for eviction or the legal process required,” she noted.
“Landlords tend to be soft, human and emotional while the estate agent is bound to be firmer as they are paid on commission.”
Dickens explained that, about 71 per cent of tenants according to current estimates pay their rent on time and in full adding that for those intending to cut costs would be landlords managing the property on a monthly basis.
“People considering buying properties to let should look into areas that show good deals and areas with rentals between three and seven thousand rand a month as they are currently performing well,” noted Dickens.