Bad news for South Africans who want to rent property

Finding a rental property in South Africa can be challenging, with demand often exceeding supply, fraudulent rental advertisements increasing, and landlords having strict requirements for prospective tenants.

The demand for rentals is on the rise in South Africa. According to Stats SA’s General Household Survey, 23.9% of households rented their dwellings in 2023. In 2024, this increased to 25.1%.

According to TPN’s latest Vacancy Survey Report, residential rental vacancies decreased between Q2 and Q3 of 2024. This resulted in a national vacancy rate of 5.07%, down from 6.72% in the second quarter.

The report also tracked the market’s perceived demand and supply of residential rental stock. In Q3, the index declined slightly from 60.36 points in Q2 to 58.97 points.

The market is in equilibrium at 50 points, and an index above 50 points means that demand is stronger than supply.

The residential rental market remained above the 50-point mark, and this was reflected in the lower vacancies seen during the quarter.

With rental demand often outstripping supply, rental agents from the Seeff Property Group said that many properties are not advertised and have waiting lists.

Because of this, they urged prospective tenants to prepare necessary documents and start searching early. This will ensure they are ready to act quickly if a rental opportunity arises and don’t risk missing out on available properties.

Unfortunately, supply shortages have made the rental market a fertile hunting ground for scammers, with Seeff warning that property fraud is rising.

Scammers typically post fake rental listings on popular platforms such as Facebook groups, Facebook Marketplace, and WhatsApp groups. They often use photos taken from legitimate property adverts.

They lure people with attractive rental amounts and claim the property is in high demand. Victims are pressured to pay a deposit or viewing fee upfront, only to discover the listing was fake and the scammer has disappeared.

Beware of scams

Given the rise of property fraud, Seeff warned prospective tenants to be very careful when they respond to rental adverts.

Seeff Pinelands licensee Johan Meyer said scams are now frequent and common. “You should always verify the property adverts, even those on mainstream sites, as scammers often clone legitimate property adverts,” he said.

“Most importantly, never pay any money until you are certain that both the agent and property are legitimate.”

Prospective tenants should also beware of application fees, some of which may not be permissible under the Consumer Protection Act.

However, legitimate agents may charge for some services, such as rendering credit checks, provided the client consents to them.

It is generally advised that South Africans work with rental agents registered with the Property Practitioners Regulatory Authority (PPRA) and have a valid Fidelity Fund Certificate. This status can be verified on the PPRA’s website.

Registered estate agents or property management companies can help prospective tenants avoid rental scams.

For those looking to find a rental property, the challenges don’t stop there. Even once they find a property they like, they need to meet several requirements before being approved.

Seeff’s agents explained that a verified income and an affordability check are usually required. Applicants must provide a stable job and at least three months’ worth of payslips which reflect their income.

If self-employed, they must prove their income and provide bank statements for up to 6 months. Their earnings must be about three times the monthly rent.

Maintaining a good credit record is crucial when applying for a rental. A credit score of 661 or higher is typically required, while a score below 610 could be a disadvantage.

Credit checks assess debt levels and payment history, helping agents determine the future tenant’s suitability and reliability before approving their application.

Preparation is key

Seeff stressed that tenants must prepare their documents before applying for a rental property, as any delays could result in losing the rental. Required documents include:

• A certified ID copy
• Recent proof of address
• Three months’ payslips
• Bank statements (six for self-employed, and, if relevant, company registration documents)

Prospective tenants must also have funds ready for the security deposit, often up to two months’ rent, the service fees, and the first month’s rental, as some of these amounts must be paid upfront.

Landlords may also require references from previous landlords to verify the tenant’s rental history.

These references demonstrate your reliability with payments, care of property, and communication, all of which play an important role in approving the rental application.

According to Seeff Sandton, tenants should also ensure they budget correctly, especially for items not included in the monthly rent payment.

Extras usually include utilities such as electricity, water, refuse, sewerage, and Wi-Fi, and may, in some instances, also include parking.

Seeff Pretoria East rentals manager PG van der Linde said tenants should always attend entry and exit property inspections and ensure the property is left in the same condition as found.

The property must be looked after, and maintenance issues must be reported promptly to protect the deposit and avoid deductions when the lease ends.

Van der Linde added that it is also critical that tenants adhere to the lease conditions and any complex rules and pay their rent on time.

The funds must be in the landlord’s or agent’s account by the first of the month. Good tenant behaviour also makes it easier to renew the lease.