township rental property

There’s a growing focus on township development, with many economic opportunities being explored. One exciting area is real estate entrepreneurship, particularly township property rental opportunities. 

For years, education and economic migrants have rented back rooms in townships at affordable rates. This has helped families with paid-up land generate extra income and build equity in their properties. However, a challenge exists: many tenants lack formal employment, making lease agreements difficult. Traditionally, tenant agreements relied on good faith and handshakes. 

Despite this hurdle, the township rental business continues to flourish. Innovative solutions from companies like Umastandi and TUHF provide funding for building additional rooms specifically for rent. 

Here at Preferental, we understand the importance of technological solutions serving the rental market. Recently, our Marketing Lead, Mr. Jabu Zwane, joined representatives from ABSA, Umastandi, Ekasi Properties, at a SAPIN-hosted “Township Property” event aimed at young entrepreneurs. Mr. Zwane discussed the pros and cons of using property management agencies versus self-management.

Using a Property Management Agency for your Township Property Rental

  • Save Time and Gain Expertise: Agencies handle tenant screening, lease agreements, rent collection, maintenance issues, and even evictions. This frees up your valuable time and allows you to leverage their experience. 
  • Reduced Risk: Agencies conduct thorough tenant screening, minimizing the risk of late payments, property damage, or bad tenants. 
  • Legal Compliance: Agencies ensure you comply with all legal regulations regarding rental properties, protecting you from potential lawsuits. 
  • Cost: Agencies charge fees, typically a percentage of the monthly rent. This eats into your profits. 
  • Less Control: You relinquish some control over your property and tenant selection to the agency. 
  • Finding the Right Agency: Selecting a reputable and reliable agency with experience in the township market is crucial. 

Self-Managing Your Township Property Rental

  • Keep More Profits: You avoid the agency fees, maximizing your rental income. 
  • Maintain Full Control: You have complete control over tenant selection, lease agreements, and property management decisions. 
  • Direct Relationship with Tenants: You build a direct relationship with your tenants, fostering better communication and potentially reducing long-term issues.
  • Time Commitment: Managing a rental property requires significant time investment, including advertising, tenant screening, maintenance, and rent collection. 
  • Legal Knowledge: Understanding and complying with landlord-tenant laws can be complex, potentially leading to legal trouble if not done correctly. 
  • Risk of Bad Tenants: Without proper screening procedures, you risk attracting bad tenants who may damage your property or pay rent late. 

Ultimately, the decision between using a property management agency or self-managing depends on your individual circumstances, risk tolerance, and available time. Carefully consider these pros and cons to choose the best approach for your township property rental business. Got questions? Get in touch with our team!