What’s age got to do with it?

The latest data in the PayProp Rental Index,  their Rental Index is a research tool that aims to transform the way industry analysts access information about rental properties in South Africa, explains that average age of landlords in their dataset is around 50.5 and this has stayed seemingly constant over the years. The average age of their tenants has also been virtually unchanged at 41.4 years.

What’s even more interesting in the index is that the average number of properties per landlord has been ” trending upward for years, with the average landlord owning 1.47 properties managed by an estate agent.” This shows that landlords have bought more investment properties over time – building a property portfolio remains an attractive investment avenue for many landlords.

The scale of affordability has often shown a steady growth pattern with tenants in their forties and fifties earning more as they advance their careers and become more established. This is solidified in the index which points out that all tenant age groups above 40 have above-average incomes.


However, it states that the percentage of income spent on rent decreases as tenants get older. “The reason we’re postulating is counter-intuitive. It happens not because incomes increase with age, but because debt levels increase to such an extent that older tenants cut down on rent. This ratio increases again for tenants over 60, as their debt-to-income ratios drop and they have more disposable income available to spend on rent,” the index identifies.

We have discussed in several of our videos and articles how affordability and risk assessment is crucial. As rental specialists, we are incredibly thorough during this process.  If we take the data in the Index tenants use on average 44% of their net income to repay debt every
month (The highest range being 58% of income in the 50-59 year old category).  “The debt-to-income ratio for tenants increases with age as people start families, send their kids to school and university and buy more expensive ‘things’ as they get older. Of course, by the time they retire, the situation is a little different – the majority of their debts will be paid off and their kids will (hopefully) be supporting themselves,
causing retiree tenants’ debt-to-income ratio to decrease once again.”

Taking all these figures, trends and patterns into consideration and the patterns created by debt ratios and age versus income once again highlights the importance of risk management.