Experienced. Trusted. Proven. “If it’s worthwhile doing, it’s worth doing well.” This is the quote that Pieter Feenstra often repeats to his young and dynamic team at the Feenstra Group in South Africa. Another, more tongue-in-cheek one is: “Be careful when euphoria is everywhere – even turkeys can fly in a hurricane.”
Feenstra’s career commenced as a consulting structural engineer. He was also the founder of TFMC, which is nationwide and has regional offices in all provinces. He formed the Feenstra Group which focuses on Commercial, Student accommodation, Inner city and Residential real Estate development.
As the Group’s Chairman and Founder, Pieter Feenstra has over 30 years of experience in property development and management. His first property development project evolved out of his consulting work as a structural engineer, during which time he worked closely with several property developers and developed a fascination for the industry. Feenstra explains that this led him to eventually take the plunge and sell his consulting firm to focus exclusively on property.
10 Things Rental Agents Should Ask Their Current or Prospective Rental Payment Provider
There are many payment applications and software providers claiming to do all it takes to manage rental payments, but rental payment processing is not for the unprepared.
Payment service providers are governed by strict legislative rules and regulatory frameworks, covering issues such as corporate governance, the management of trust accounts and the protection of personal information.
And while there are various providers that might comply with the applicable laws and regulations, there are further questions that you as a rental agent should ask your payment provider or prospective provider:
1. Does their payment platform make your annual audit easier? Audits can be stressful and time-consuming for rental agents – and a lengthy audit process can get in the way of their regular tasks. A payment processing system that provides complete and well-organized data makes audits quicker and easier, but not all platforms do so. Ask your provider how, specifically, their system helps during audit season.
2. In the normal run of business, professional money handling is just as important. Can your provider’s system pay all landlords, all suppliers and the agency from fully reconciled client accounts within minutes? Or will your clients be kept waiting for their money while you struggle to reconcile large numbers of transactions spread out throughout the month?
3. Who owns their payment processing system While some popular platforms are independently owned, others are operated by property managers and estate agents, or by people with close ties to specific agencies. Ask yourself if you could trust a rival agent to manage your rental payment processing.
4. Can their system tell you where your clients’ money is now, or where it has been at all times since coming into the system? The system should offer an automated audit log that informs you of every transaction on the platform and lets you see who made it – and that record should be saved permanently and automatically in such a way that it cannot be changed or deleted
5. What measures do they take to keep customer data safe? A provider should offer bank-level security, including state-of-the-art encryption, and keep backups in multiple secure locations. Data loss – or worse, data theft – can result in huge losses to clients and destroy an agency’s reputation.
6. Is training and technical support readily available, for free, for the lifetime of the contract? How does the onboarding process work? Will a real person be available to help you while you migrate to the new system? With a service as vital as payment processing, you should always be able to get timely help from a dedicated expert via telephone or e-mail.
7. How clearly are the payment platform’s trust accounts separate from one another? Some payment services providers cut corners by pushing incoming payments to a single settlement account, but this creates a risk of paying one landlord with another landlord’s money – or even of using tenants’ security deposits to pay for repairs during the lease. Payment providers can prevent this by keeping trust funds separate at all times – ask your provider if they do.
8. Are your trust accounts reconciled to the cent, daily? Does your service provider have a dedicated team of professionals who handle this? Regular reconciliation of payments ensures that accounts are more accurate and that landlords and contractors receive their payments more quickly.
9. Does your provider charge extra for functionality that should come as standard? Some payment services platforms restrict vital platform features to premium users. You should also check that there is no limit to the number of landlords or properties that you can manage on the system – or risk an expensive surprise down the road.
10. What is your provider’s track record in the residential rental payments space? Ask your provider for their credentials – and ask yourself if you can afford to gamble on an untested system.
Don’t settle for less
Asking the right questions will ensure that agents find the best possible payment processing partner to work with. As with any financial partner, it’s vital to understand all the possible pressure points before signing on the dotted line.
While aggressively-priced payment processing systems may look tempting, particularly in uncertain economic times, they may only be able to reduce their prices by cutting corners – and with so many legal requirements to meet when it comes to payment processing, there are some corners that shouldn’t be cut.
This sentiment is shared by Head of Partnership Growth SA at IWG, Alan van der Westhuizen. For Alan, boundless visionaries who excel in the work they do ignite his spark to work hard to keep the standard of his work extremely high. “Big thinkers that can bring innovative ideas to the table excite me, being able to see the opportunity and to activate it motivates me and planet-friendly, sustainable ideas motivate me as well.”
Coworking has not always been alienated from human nature. It has always been common amongst people either in group projects at the same workplaces like with Van der Westhuizen who has co-worked with an acquaintance for more than twenty years in the food and beverages sector, where he co-managed the day-to-day running of the restaurant. “After a number of years abroad working in the hospitality industry, I returned to SA to join a friend and founder of News Café who had just opened his first store in Pretoria.
Fournews was formed in 1996 and I was responsible for franchise development in the group since its inception. My skills vary and range from strategic and operational management to the financial analysis of franchise brands and more recently into the development of new brands. I was also responsible for the appointment of operational management and have, over the past twenty years, assembled teams that display the same passion, enthusiasm, and determination that I do.”
Co-living, a new-ish take on accommodation, is gaining momentum across the world as an innovative model to embrace – or elbow nudge – that could very well support the new normal way of living we now find ourselves in, in terms of affordability, accessibility, and functionality. Although one might conjure up visions of hippie-type seedy communes of the 1970s, modern co-living brings a smart and appealing solution to a new-found, progressive property market, be it for investors or residents, and particularly now for tenants who find themselves unable to honour their rentals during the COVID crisis.
Sebastian van Greunen, Development Manager at Flyt Property Investments says that we should see this upgrade of communal living enjoy a re-surge of popularity in South Africa that will provide a post-COVID living option which will also bridge the gap for urban residents looking for homes that provide secure micro-spaces, shared living areas and common spaces at affordable prices while providing slightly larger private areas for independent living too.
Ironically, whilst we live in a connected world, there is a feeling of isolation – social distancing, if you will, and as such young professionals, millennials, digital nomads, creative entrepreneurs, and students are moving towards accommodation that embraces a sense of community and a shared economy, but in a safe haven. This concept also works well for remote workers looking for temporary, short-term accommodation or a few nights a week when in town on business. These ‘global citizens’ are looking for a place that feels like home, which is private and cultivates a sense of security, that creates continuity in terms of community, whilst also being inclusive.
Van Greunen states that there has definitely been an increase in rentals in the co-living space, with millennials representing the largest share of the market: “Their particular, flexible lifestyles of living, working and playing are shaping the industry as a whole.” He adds that the concept includes the aging population whose rising healthcare costs are also nudging them to consider the co-living model.
You’ll find these urban rental apartment communities popping up in key suburbs throughout South Africa, providing excellent investment and rental opportunities that are affordable and flexible. These well-designed models, like Eaton Square in Diep River, for instance, deliver innovative common spaces, fully equipped co-working areas, restaurants and coffee shops, and compact, efficiently designed apartments that have their own kitchen and living areas.
Additionally, flexible rental options allow residents the freedom to choose how long they wish to stay, whether it’s a few days, a few months, or longer; and the fully-serviced aspect allows for ramped-up hygiene and sanitation standards, along with more frequent and improved housekeeping and cleaning practices.
Across all age groups, this co-living concept is proving to be a popular option that, along with affordability and the latest technology, will soon become the real estate investment preference in alternative living. In a fast-paced world with a constantly changing landscape, co-living provides the perfect “plug & amp; play” model so that you can afford to pay your rent and get on with living
If you buy a freehold home in an estate or any other gated development, the future value of your property will depend very heavily on how well that development is managed by the Home-Owners’ Association (HOA) and its directors.
“And on the one hand that is one of the major advantages of buying in an estate rather than an ordinary suburb where one is dependent on the local authority for services and there is no real control over the appearance or maintenance of individual properties,” says Gerhard Kotzé, MD of the RealNet estate agency group.
“On the other, however, it means that you need to make sure the HOA is functioning well and can continue to protect and enhance the value of all the homes in the estate by providing excellent security, maintaining all communal spaces and facilities and making sure residents stick to the original architectural guidelines.
He says it is particularly important for those who are buying new homes during SA’s Covid-19 lockdown not to forget all the normal precautions, and that those who are considering purchases in established estate should thus first do the following:
Establish the percentage of owner-occupants in the community versus the number of tenants. “There is a good reason that banks are often more reluctant to grant loans to prospective buyers in developments where more than a third of residents are tenants. They know from experience that resident owners are more likely to take care of their properties, and the communal areas and facilities, than tenants or landlords who don’t live in the community.
“And the market value of property is directly related to the availability of financing. No loans will mean falling values.”
Ask to see the current assessment/ levy collection record and find out what percentage of owners are 90 days or more in arrears with these payments. Kotzé says that if the percentage of delinquent owners is high, it means the HOA does not have an effective collections policy or procedure and, quite simply, that things are set to get worse as defaulters get away with non-payment.
“Levy funding is the only money the HOA has to pay for maintenance and security and if this is not available, the value of all homes in the estate will be threatened as it becomes increasingly run-down.
Find out if the HOA has a stated reserve fund requirement and how much it has in this account. Such a fund is vital to cover “planned maintenance”, that is the predictable costs of repairing or replacing certain communal assets without having to raise special levies, and contributions should be included in the monthly levies paid by owners, he says.
“A well-run community will have more than 75% of the reserves it needs in the bank, and lower levels generally spell trouble because necessary repairs and replacements are likely to be deferred, once again to the detriment of property values in the estate.”
Ever since Covid-19 put everyone in SA into a hard lockdown at home, there has been a steady increase in the number of people rethinking their housing choices and deciding to make changes as fast as they can. And one of the biggest trends to emerge has been the migration away from big cities to smaller towns along the coast or in more rural settings.
However, says Gerhard Kotzé, MD of the RealNet estate agency group, there are many factors to consider before you just make the leap from city to country living, starting with the real costs of relocating. “One of the biggest drivers of the current movement away from the big cities is the desire for more living space and more opportunity to take part in family outdoor activities – and the prospect of buying both these things for much less in the countryside.
“This applies particularly to those who have children and found out during lockdown that their homes were too small to accommodate everyone’s needs (home office spaces, home-schooling spaces, home gyms) when they were all at home together.”
And it is true, he says, that home prices are often considerably lower in smaller towns, which gives buyers the opportunity to purchase a bigger property for the same money and often, the chance to get closer to nature too. “We also see quite a number of people now moving from the suburbs to country or coastal lifestyle estates that offer a range of sports facilities and outdoor pursuits.
“But it is very important to include several other items in your calculations so that you can determine the real cost of the new lifestyle you envisage. These include one-time expenses such as the legal and transfer costs that apply when you buy a new home, the costs of selling your old home, the costs of moving all your belongings, and the costs of any renovations or upgrades to your new home.
“You also need to plan for ongoing maintenance, just as with your current home, and if you are planning to live in a really remote area, you probably need to increase your transport and vehicle maintenance budget. Then if you are moving to a country estate or gated complex, you will need to include the monthly levy.”
Other strong motivations for packing up and heading for smaller towns, Kotzé says, include a growing desire among many families to live closer to certain friends or relatives who make up their extended support system and, among younger homeowners and tenants especially, the closure of many of the shops, restaurants, and workplaces that used to make city-centre living fun as well as cost-effective.
“Many young people just don’t see the point anymore of paying higher rents or home prices for a tiny space in the inner city when they are now working remotely anyway and can probably pay much less for more space somewhere else. That trend has been boosted by the current very low interest rates, which are also making it cheaper for many young remote workers to buy their own home instead of renting, especially if they move out of town.”
To make this plan work, though, their preferred location does need to have really good internet and cell phone connectivity, so this is the second most important thing for remote workers to check while planning an “escape” from the city, he says.
Other vital considerations include:
*Basic amenities. Many small towns in SA have erratic water and power supplies, so you may need to buy a generator, water storage tanks and some solar power panels if you want to live comfortably. You should also check the state of the access roads and decide if you will need a more rugged vehicle.
*Shops, schools and medical services. You might not want to live in a town with a huge shopping mall, but it’s not much fun to have to drive 50km to the next town every time you need bread and milk or medical attention, so it’s important to ensure that there is a local outlet for basic supplies – or better still, a local farmers’ market where you can buy fresh bread and produce – and a local doctor. If your children will be attending school, it should preferably also not be a long daily bus ride away.