What is rental assist?
Most of the IGrow Wealth Investments’ buy-to-let investment opportunities include rental assist. But what is this financial tool and how can you use it to your advantage?
Rental assist is paid on a monthly basis to help cover an investor’s shortfall. GRAPHIC: Amber Dawson.
For many buy-to-let property investors, the almost inevitable monthly shortfalls at the beginning of their investment can make for a difficult lifestyle adjustment.
But, by using IGrow Wealth Investments’ rental assist, the impact of these shortfalls can be minimised if not eliminated.
“This product is an additional amount paid to the investor on a monthly basis over and above the monthly rental received from the tenant,” said Lezelle Kirsten, new developments project coordinator at IGrow.
“This means more rental income is received to cover the expenses of the property.”
Bianca Botha, rental portfolio manager at IGrow Rentals, echoed this statement.
“Rental Assist is an additional payment, to the investor, on a monthly basis for a certain period of time,” she said.
In addition, Kirsten was quick to emphasise that this product is an exclusive, negotiated offer only available to IGrow clients on most developments.
“Rental assist is negotiated upfront with property developers and IGrow Wealth Investments and forms part of the agreement of sale of the property. Once the property is registered in the deeds office the rental assist amount becomes available to the benefit of the purchaser,” she explained.
Management and benefits
It is important to note that rental assist is not a form of credit or finance but rather a cash amount made available in monthly increments.
This figure is calculated between a 12 and 48 month basis to ensure the investor reaches break-even faster.
IGrow Rentals national manager Karen Grobler gives a brief explanation of rental assist. VIDEO: IGrow Wealth Investments.
For Botha, this product is most useful because it helps the investor lessen their monthly shortfall at the beginning of their investment.
“Rental assist therefore ensures that less money goes out of the investor’s pocket to have to pay this shortfall,” she elaborated.
Werner Scheffer, project development co-ordinator at IGrow, maintained that a proper investor’s number one priority is to get to a position where the income received monthly, covers their expenses, and reaches break-even.
“The moment the property starts showing positive cash flow, the investor can use this income to qualify for further bond financing and acquire more properties,” he said.
