Now that international travel has resumed, many South Africans are following through on their plans to emigrate, and a large portion of these soon-to-be expats still own property here.
Depending on the visa routes they are taking, the countries they are moving to, and the amount of start-up capital they need on the other side, some of them have no choice but to sell their homes to finance the relocation. Others, however, are in positions where they can hold on to their properties in South Africa, but are not sure whether they should.
Although this option gives one a back-up plan in case their overseas venture does not work out, or allows them to use the property as a holiday home or even one in which to retire, the choice of whether to sell or let can be a difficult one.
Let it go?
Although your decision depends on your financial health, in some cases it is advisable to sell as emigration is already a stressful process and liquidating assets can go a long way to sustaining you through your first year or two in a new country. It can also be financially and emotionally distressing if you need to spend money maintaining the property. If you do not have a trusted agent on your side then you will need to manage tenants on your own from afar, and that can be difficult when regular inspections need to be done or when dealing with a defaulting tenant.
It’s difficult enough to emigrate and adapt to a new life without having to worry about a property in South Africa, what your tenants may be doing, and what problems there may be in terms of erratic municipal services, even if you have an excellent rental property manager. If you really want a rental property, rather buy one close to where your new home is.
It is also becoming difficult to find quality tenants. There are strict income, employment and payment record verification procedures in place to protect landlords and, in some areas, up to 70% of prospective renters are not making it through these checks.
If you do, however, want to keep your property and let it, you should never try to manage it from a distance without the help of a qualified and experienced rental manager who you trust. You also need to prepare in advance and take care of property repairs and maintenance issues before the property is let and ensure that you keep in line with rental pricing trends.
Furthermore, if you are letting your home fully furnished, you need to prepare an inventory of all the furniture and equipment, and the tenant needs to sign an acknowledgement of the inventory at the incoming inspection. Like any other investment, the key lies in intelligent asset management. Having a rental expert on board can help minimise risks and maximise returns in the long term, allowing a stress-free rental.
What if the move is urgent?
Whether it is better to sell or let your property will also depend on the urgency of your move. There is adequate demand in the market in most areas to be able to sell, especially in the price bands below R2 million, so you should be able to attract offers, provided the property is priced in line with the current market. The difficulty with keeping a rental property when you emigrate is that you are not here to look after it.
If you need to sell your home quickly because of relocation deadlines, the key factor is pricing, so start off with a valuation and then ensure your property is priced correctly to sell. You should also sign a mandate with an agent. With a sole mandate, your agent can afford to give your property their full attention because they’re guaranteed the commission from the sale. That means they’re not going to shy away from spending more time and money on marketing or putting more effort into negotiations.