Success in residential property development depends, to an ever increasing degree, on being able to offer an on-going, one-stop service, says Paul Henry, Managing Director of Rawson Developers.
“The days when a developer could ‘ride into the sunset’ once he had handed over the units in his development are long gone,” said Henry.
In the areas where Rawson Developers are most active, i.e. Rondebosch, Claremont and Kenilworth, he said, his team has seen a huge influx of buy-to-let and upcountry investors. One of the main reasons why they favour certain projects here, particularly those developed by Rawson Developers, he said, is that they know they can achieve high gross returns from day one and know that they will see their units appreciate at 5% plus per annum, even in the current tough economic conditions.
This type of investor, said Henry, does not want to be bothered with administrative work. He wants to be hands-off and at the same time have peace of mind, knowing that he is dealing with reliable operators. He therefore expects to deal with a developer who offers a package which includes:
- The sale of the unit and assistance with all legal transactions that accompany such deals.
- The ability to arrange bond finance, preferably in-house.
- Timely attendance to all snag items in the immediate post-sale period and, subsequently, to the maintenance of the unit in response to the tenants’ complaints. This service can also include a daily or weekly cleaning service.
- The finding, vetting and management of tenants, as well as, the securing of all deposits and monthly rentals. The vetting process, said Henry, is particularly important as it eliminates the possibility of taking on an unreliable payer. In his experience only professional agents with good links to credit bureaux are able to carry out this service efficiently.
- If the unit is to be let fully furnished, the furnishing of the unit (carried out by the developer) must be in line with the investor’s taste.
- The checking up on and management of the tenant to ensure that he or she is caring for the property and is not breaking any of the house rules.
- Ensuring that a reliable and effective managing agent is appointed and that the developer engages with this agent on a regular basis.
“Today’s investor,” said Henry, “knows he needs a developer who will conscientiously attend to all defects and not try to avoid his responsibilities here. He also wants a rental agent, who knows how to select good tenants and is absolutely punctual about ensuring rents are paid on time, to be part of the team.
“A developer who has his own construction and maintenance teams and is tied into a good estate agency does have a head and shoulders advantage over the old type of developer, who was inclined to be simply a designer and builder with, possibly, a small in-house sales team assisting him.”
