Rents are on the rise and this is what you should do to protect yourself against property inflation as tenants.
While homeowners are enjoying a silent boom in the property market the national average national rent increased to R7,958 in the first quarter of 2022 from R7,819 a year earlier thanks to a 1.8% increase in residential rents between Q1 2021 and Q1 2022. The only province to have negative growth in the first quarter of 2022 was Gauteng. In Q1 2022, the average rent in this province dropped by 0.1% (R11), to R8,379 according to the PayProp Rental Index report.
The greatest rental growth rate in Q1 was 5.3% year over year in Mpumalanga. Following a 3.8% growth in Q4 2021, this was the province’s second consecutive quarter at the top of the table. There, the median rent in Q1 2022 was R7,866.
In the meanwhile, despite the epidemic, growth in Limpopo persisted in Q1 2022, following six consecutive quarters of positive growth. Tenants paid an average of R7,189 per month over the quarter, a rise of 4.6% YoY in the province’s average rent and the second-highest after Mpumalanga.
The average rent in the Western Cape increased from R9,142 in Q1 2021 to R9,399 in Q1 2022, maintaining its position as the most costly province for tenants despite the healthy 2.8% increase.
After the Northern Cape and Western Cape, the province had the third-highest average rent, but competition for third place was fierce because Gauteng’s average rent was only R2 less than KwaZulu- Natal’s. Rents in KwaZulu-Natal ended the quarter at R8,381 compared to R8,177 in Q1 2021, a 2.5% YoY increase.
Some protective tools could use:
1) Converting to rent to own:
The first one might seem obvious but buying or renting to own has several benefits because although your home is an asset that will increase in value over time if you can secure a low-interest, fixed-rate mortgage, the cost of your home will remain constant as the value of your home increases.
2) Negotiate a discount
If you can afford it, propose paying the entire lease in advance or at least a few months to receive a discount. The landlord might agree to a bargain in exchange for cash, but it is only an option if you have sufficient money to meet the rent plus some extra. Because you depleted your bank account to make a few pennies in rent savings, you don’t want to end up with credit card debt. Due to credit card interest, the funds would be lost. Additionally, if you want to pay in advance, be sure to put the money back into your savings each month.
3) Get a roommate
The most money can be saved by doing this, which is a no-brainer. In South Africa, a two-bedroom apartment will typically cost is about R8000 as of 2022 and when divided by two. Multiplying that by 12 results in sizable savings. Additionally, it excludes shared costs for groceries, toiletries, kitchenware, and utilities so it should be a consideration.
4) Consider a New Location
One of the most cost-effective ways to reduce your rent payment is by doing this. If you want a city like Cape Town or Sandton but feel can’t afford those prices, think about growing places like Durban and Johannesburg whose rents seem plausible in the era of work from home (remote) employment.
5) work from home
Speaking about working remotely another smart hedge could be the tax benefits from being regarded as a work-from-home worker by Sars. Costs can include cell phone, internet, or fibre costs where these have been used mainly in their employer’s business and are necessary for the employee to be able to perform their work duties from home. These will be regarded as reimbursed costs and not subject to employee tax.