JOHANNESBURG - Although rental demand rises during an economic decline, rental rates come under pressure. This means that landlords will need to relook their expectations.
Seeff provides a few recession tips:
However frustrating the economic climate may be, it is important to consider that it is better to fill your property at a lower rental than to let it stand empty. Your profit margin may be a bit lower and while not the ideal position that you would want to be in, at least you will still be earning rental returns
There is little to gain by a landlord who sticks to a high rental rate or escalations that are out of step with the economy as this may prove unsustainable.
The likely outcome of sticking to high rental rates or hiking your rate by an above-inflation escalation, is that you will end up with tenants who are unable to continue paying the high rental amount. Once a tenant goes into arrears, it often becomes difficult to recover from that.