[imagesource:here]

It’s no secret that the national lockdown has negatively impacted myriad business sectors across South Africa, including the property market.

Much has been written about the difficult situation that landlords and tenants have found themselves in over the past few months.

While some believe that long-term, we could be looking at a boon for the market in terms of property sales, rental properties are having to adapt to a new normal, finding creative ways to stay afloat.

BusinessTech spoke to Jacqui Savage, national rentals manager for the Rawson Property Group, about some of the ways that the trends arising out of the lockdown period.

Airbnbs are turning into long-term rentals

Under alert level 4 and 5, Airbnbs were unable to operate, which means that a property with the potential to bring in more revenue than long-term rental, especially during tourist season, was suddenly generating no revenue at all.

As a result of this, many Airbnb owners have chosen to convert their properties into long-term rentals, “competing with those already on the market”.

Renters are more interested in unfurnished properties

Furnished properties tend to attract much higher rentals than unfurnished properties. In uncertain economic times, long-term tenants are favouring unfurnished properties. Tenants are also more inclined to feel comfortable when surrounded by their own belongings.

To meet this need, Airbnbs converting to long-term rentals have started removing the furniture from their properties.

(If you’re a landlord looking to store your furniture, 2OV readers get 50% of their first month’s rent at Stor-Age.)

Tech-enabled rental services are on the rise

Extreme physical distancing has moved a number of services online, including the rental industry.

The national lockdown might be temporary, but physical distancing is likely to continue long after we’ve contained the virus.

Enter cutting edge technology that delivers the same level of service while ensuring tenants’ and landlords’ health and safety. These include “virtual valuations, 3D virtual tours, and real-time virtual showhouses”.

This is likely to become the norm over the next few months.

Negotiated payment plans

PayProp recently released its 2020 Rental Index revealing some unsettling statistics.

During March, just over 20% of tenants were in arrears, increasing to almost 24% in April. Head of Data and Analytics, Johette Smuts, says that the average extent of arrears jumped from 78% of monthly rent in March to a massive 84%.

“While we have already seen an increase in both the percentage of tenants in arrears and arrears as a percentage of rent in April, we expect May and June to be even worse. This position and the debt recovery process will be influenced by the pandemic, the lockdown levels and their duration.”

Tenants are battling low-income growth and a high level of unemployment which has ultimately led to financial challenges. The increase in the cost of living across the board has exacerbated the situation.

To deal with this, many landlords are adapting by introducing progressive payment solutions.

Rather than losing a good tenant who has fallen on hard times, landlords are negotiating payment plans that incorporate creative solutions like deferred payments or using the deposit to cover rent for a limited period.

These trends are indicative of the vast potential of business sectors to adapt and grow during trying times.

There’s something hopeful about that.

With many renters downscaling, and many landlords moving to unfurnished properties, self-storage options have also become increasingly necessary.

Once again, a reminder that 2OV readers score 50% off their first month at Stor-Age, with outlets located throughout South Africa’s main cities.

[sources:businesstech&payprop]