Cape Town - Buying a holiday home strictly as an investment to rent out, or as a second home to live in is an exciting time for any buyer.
Fin24 recently published an article in their Property Issue about investment buyers returning to Cape Town to acquire a holiday home of their dreams.
As the summer arrives in Cape Town, the property market starts to turn and naturally property sales increase.
However, don’t let the souring temperatures, fine Cape wine and holiday spring blur your vision of what to expect when your newly acquired gem has just been signed for.
The most important thing to consider is what happens when the holidays are over? Most buyers try three options that come to mind, two of which are doomed to fail; maybe not this year, but certainly within the next few.
1. Manage the house from afar
- With the advent of technology most new holiday home owners try to manage their new homes from afar. They go to the extent of setting up bank accounts they can access from overseas with preloaded beneficiaries. Some owners even try installing cameras linked online so they can check the pool cleaners arrive on time.
- In the long run, we find this type of micro-management from afar eventually hits stumbling blocks as certain things crop up that simply cannot be resolved without physically being at the property.
- Our more experienced multiple home owners don’t waste their time or energy with this method and truly value the art of delegation as a means to solving their holiday home issues from afar.
2. Leave the house to a friend/relative/house sitter
- Doesn’t seem such bad option from the start, especially if they are just down the road and seem perfect to “pop in” and keep an eye on things.
- This usually works for a while, but eventually the problems come crashing back to the owner, when a relative doesn’t want to be involved anymore, or a friendship comes soured because they weren’t giving the garden the attention it deserved.
- House sitters can be even more complicated and certainly are not a sustainable long term option.
3. Contract a professional management company
- By far the only way to go to truly have peace of mind. From experience, once novice first time buyers have tried and exhausted other options above and accept the services of a good management company – they never look back!
Why a good property management company matters?
Most holiday home buyers, especially those emotionally attached, can only think of all the nice things they will do to their new home once they get the keys. This usually revolves around planning add-ons, paint colour changes, interior design and all the fun creative side of making a home.
There’s a lot more dirty work to consider when taking over home that’s not to be missed:
Depending on the situation, property transfer in South Africa can usually take up to three months. Often it is expected that the previous owner will care for the property prior to transfer.
Unfortunately we have had experiences of accepting homes with a dead garden and green pool, as the previous owner had left the country two months prior, leaving a bitter sweet taste for the new owner and transferring attorneys.
So be sure to keep in the loop with the sales agent and the attorneys to make sure the handover is as you expect it to be.
2. Property defects
Be aware of any defects your new property may have. It is worth using the services of a property inspector to check for any major structural problems or other defects prior to making the offer.
If something is picked up, this can be negotiated with the owner to be repaired prior to transfer. A good property manager would be in a position to monitor this process to ensure it happens.
3. Mailbox management
Be careful of this seemingly obvious but rather problematic issue, which if not cleared weekly of free newspapers and flyers, screams that this property is empty and no one is home, to every passer-by. It's not an ideal situation to be in, so plan how to manage this to ensure you’re not advertising for a burglary.
Once transfer takes place, those monthly accounts suddenly fall into your lap. We have had experience in the past when the owners had assumed they would simply pay these via online banking and got caught up overseas unable to add beneficiaries to their profiles. You certainly don’t want the water or electricity cut off as this can cost you a lot of money if not dealt with quickly.
Be sure to ask the previous owners of the house for a property manual or contacts list. This is not always available but is a huge help to you as the new homeowner or your manager. Things you should request should be instruction manuals for appliances, architectural plans as well as any guarantees for installations done at the property.
It is also important to get a list of contractors' contact details who have worked at the property to ensure a seamless handover.
Cape Town weather can be harsh on your property. No matter the quality of the house in Cape Town, sooner or later you will experience a leak. A good property management company will make extra inspections of homes after a full storm. Nine out of 10 times there are issues to be resolved. You don’t want to find a collapsed ceiling two months after it actually happened.
7. Eyes and ears
Last but not least: Every home needs its eyes and ears. Small and large things happen all the time and someone needs to know about these. For example, if a neighbour is going to demolish his house next door to you and build a three-story mansion, they would need to seek your approval.
If they follow the council process you should get a registered mail to your chosen address, and usually have a month to respond. If no response is received in 30 days, the council will assume you do not object.
Don’t get caught out if you are overseas and come back to find work is already underway. It will be too late to object and your property value may plummet if your mountain or sea view gets blocked.
* The guest post was written by Quinton Sole, director of HQM Properties. "As an experienced property management company, we are on the look out for all of these sorts of issues that can arise. We have successfully helped hundreds of property owners over the last 10 years in Cape Town to avoid such issues, which has helped save them time and money."
* Visit www.hqmproperties.com or email Quinton at firstname.lastname@example.org