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. And Andrew Golding of the Pam Golding Property group says there is no one-size-fits-all answer.
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“It all depends on the individual’s assessment of a number of influencing factors, personal circumstances, and choice,” he says.
Let it go?
Although your decision depends on your financial health, Craig Mott, Cape Town regional sales manager for the Rawson Property Group, says that, 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.”
Chas Everitt’s Berry Everitt agrees that the best choice is to sell.
“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.”
From the property group’s perspective, it is also becoming difficult to find quality tenants.
“We have strict income, employment and payment record verification procedures in place to protect our 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, Everitt says you should never try to manage it from a distance without the help of a qualified and experienced rental manager who you trust.
Mott says 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.
“Get your rental property valuated by a rental agent, and market it in accordance with that.”
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,” Everitt says.
“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, says Samuel Seeff, chairman of the Seeff Property Group.
“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, he emphasises, is that you are not here to look after it.
If you need to sell your home quickly because of relocation deadlines, Mott says 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 sole mandate with an agent.
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“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.”
Everitt agrees: “Award a sole mandate to a successful real estate professional who understands the urgency of your situation, will price your home to be competitive in the current market and be willing to negotiate with prospective buyers.”
Duane Butler of Seeff Randburg advises that you be upfront with your agent about your needs so he or she knows whether it is an urgent sale.
“And be flexible with your pricing so that it is in line with the market.”