Landlords, Property Developers & Investors are unlocking the benefits of prepaid meters in a post-COVID South Africa.
Prepaid meters and metering have become increasingly popular over the last few years. In 2020 as lockdown restrictions have eased there has been a definite growth in popularity of prepaid meters. Both electricity and water meters have seen an increase in popularity as landlords, developers, and property investors seek to manage risks and costs associated with property rentals and ownership.
COVID Exposes Weak Points
South Africa’s Lockdown has restricted people to their homes for extended periods of time as business, schooling and most daily activities were forced to shut down or were severely limited.
This has led to a number of challenges for both tenants and landlords. Some of these challenges include:
- Higher consumption of water and electricity while at home
- Loss of income leading to late or no rental payments
- No meter reading possible
- Tenants not able to move out
- Landlords not able to do or continue eviction process
- Estate agents not able to show properties, resulting in units remaining empty for extended periods
For both tenants and landlords, the above challenges need to be managed fairly and cost-effectively.
The question is, do prepaid metering solutions offer a viable option for addressing some of these challenges?
Before answering this question it is worth jumping ahead to see where the Real Estate industry may be heading in the near future.
Changes to the Real Estate Landscape Predicted
There is no doubt that the Real Estate landscape is changing just like numerous other industries. But what shape and form will these changes take on?
We looked into some possible changes and trends that may give us greater insights.
Working From Home
During Lockdown, more than 77% of people were able to work from home, according to Statistics South Africa. While this most likely is the case with office workers as opposed to factory workers, it nevertheless indicates that working from home is possible and more than likely, this will be a preferred working method for many people and companies.
The latest FNB Residential Property Barometer suggests a behavioural shift towards investing in larger residential properties as proximity to fixed offices becomes less important.
While it is expected that the majority of people will return to offices, the likelihood that demand for office space will see a decline is very real. So what will happen to the offices?
Changes to Office Space Utilisation
According to Francois Viruly, University of Cape Town’s (UCT) head of the Urban Real Estate Research Unit, Co-Working Spaces may see growth in popularity. With many companies looking to reduce the size of their offices both due to cost as well as to reduce the numbers of staff working together, co-work space could be a good option for staff who cannot work from home or are part of a distributed staff.
As many companies downsize their office space and demand reduces, the idea that some offices may even be converted into apartments or other residential forms comes to mind too. While this would necessitate significant modifications in some cases it may very well appeal to office block owners who have found that business tenant occupancy has dropped significantly.
The Rise of Community Shopping Centres
The growth in value of many community shopping centres has exceeded that of many large malls for the last few years. For many people, the convenience of, and less crowded smaller centres are a popular alternative to busy malls.
While this may not be the case for every community shopping centre the future may see people wishing to congregate less and so spread out more.
Managing the costs of running smaller centres and becoming highly efficient will be vital to maintaining profitability.
Solving Problems Through Prepaid Metering
Prepaid meters, both electricity meters and water meters can help solve a number of problems for landlords, property managers, Real Estate Agents and property investors.
We’ve outlined four broad areas.
Control & Budgeting
One of the most important aspects of using prepaid meters is that they allow you to control your utility costs. You get to see exactly how much you consume and this gives you a much higher level of control and an ability to budget. This is important both from a tenant point of view and a landlord point of view.
Prepaid meters can also save you time and money on administration costs as there is no longer need to read electricity and water meters, calculate rates, draw up and send statements and manage account payments.
Say goodbye to utility bill disputes. Because electricity or water is purchased prior to consumption there are no overages or nasty surprises at month-end. How much electricity or water is consumed depends on how much is purchased so no one can claim the meter reading was wrong or guessed at.
Tenants who fail to pay utility bills which then mount up in the name of the owner can be relegated to history once a prepaid meter is installed. Property owners can effectively reduce their risk of unwanted bills with municipalities by opting to install prepaid meters.
JKNV Energy is a professional installer and supplier of quality prepaid metering products and vending solutions. To find out more about our products and services contact us today.