Start your own business with just R600 and a phone
A perfect storm is brewing for entrepreneurs: A slow economy, negative national average property price inflation, consumers’ high debt-to-disposable-income ratio, banks’ strict mortgage lending criteria and South Africans’ battle to sufficiently save for home loan deposits, as well as homeowners’ reluctance to sell. On the flip side, rental price inflation recently surpassed home price growth and an increasing number of tenants are in good standing with their landlords and rental agencies.
All indications suggest that the rental market will continue to outperform the home buying and selling sector for the next few years as tenants are, for the most part, unable to “graduate” to homeownership and stock shortages persist in the major metros.
The local rental market is also undergoing a lot of change and landlords with property portfolios of more than three homes are increasingly turning to reputable rental agencies to manage them and their tenants.
The Rental Housing Act makes it crystal clear, too, that ingoing and outgoing inspections are a necessary requirement for landlords or their rental agents to perform and document – with the tenant and landlord/agent being present.
“Rental agents hate doing these inspections,” says David Hutchison, sales director at rental inspection software company, Property Inspect. “These companies either have the agent do it, employ an in-house inspector, or outsource the function.”
With the average time it takes to conduct a detailed inspection being in the region of two hours, and with month-end being the busiest time when these inspections typically take place, a rental agent who has to conduct inspections and still assist new or existing landlords by finding and tenanting their homes, could be tied down for more than a day or two just conducting inspections. This excludes the time the agent has to spend on capturing the report on their office management system. Rental agents also typically do not charge for the inspection as it is seen as part of their service to landlords – so essentially they lose income while performing ingoing and outgoing inspections.
This opens the door to savvy entrepreneurs who are either looking to invest in a side business or, if they have the correct connections or time available to create these business relationships, to do it themselves.
Hutchison says the barriers to entry are so low, that for the cost of a cellphone contract and access to Property Inspect’s software at a minimum of R600 per month, a property inspection business can be born.
“Right now there are no qualifications required to conduct a property inspection,” he says, noting that Property Inspect’s parent company, Property Sprout, provides users with training videos and knowledge resources. “This is an industry built on speed and efficiency. Property Inspect can be downloaded on an inspector’s phone, the entire inspection can be documented on the device (which saves to the cloud), and digital signatures hold each party accountable. Because the inspection is captured and saved to the cloud in real time, there is no need for the agent to go back to the office and capture the results, nor to wait for landlords and tenants to print out the report, sign and send back.”
A property inspection can cost anything from R500 for a one-bedroom, one-bathroom apartment, with the inspector then loading the price per extra room. An inspector would therefore only need to conduct two inspections (or four hours) a month to make a profit.
“The ingoing and outgoing inspections’ costs can be split between the landlord and the tenant, depending on the lease agreement,” says Hutchison. “They can each be equally charged for and clever entrepreneurs will offer clients package deals at a discount to secure ingoing, mid-term and outgoing inspections.”
Professionally conducted ingoing and outgoing inspections are the only way to provide genuine proof of damages which can be the very difference between landlords holding tenants financially liable for breakage or landlords having to absorb the costs from their own pockets – and potentially passing this on to the rental agent.
Interested? Visit Property Inspect for more