Future Rental Income

Launching the Buy-to-Let proposition with "Future Rental Income" as a first to market solution for investors

September 2018

We are delighted to announce the introduction of Future Rental Income in the affordability assessment of a Buy-to-Let applicant purchasing residential investment properties for letting purposes. Taking Future Rental Income into account in an applicant’s affordability assessment without having to provide a lease agreement is the first of its kind in South Africa.

The Proposition

The future rental income solution is designed specifically for residential property investors who already own two or more residential properties either bonded or un-bonded, with Absa or another bank. That is, they would be purchasing their third or more residential investment property for letting purposes, but by virtue of the new purchase, they are unable to provide evidence of the Future Rental Income to be received at the time of application. To overcome this challenge, expected Future Rental Income may be included into the applicant’s Buy-to-Let affordability assessment

The Buy-to-Let solution currently offers property and tenant management solutions to further support our customers in their wealth creation journey based on an investment in residential property. Our key partners offer great discounts to Absa Investors:

  • TPN – tenant management software, leasing documents and suburb investment reports at 25% discount
  • Trafalgar – tenant sourcing management for up to 50% discount on fees

In addition, investors will have access to financial planning through the WIMI Virtual Advice Team. Financial Planning is essential when striving towards achieving financial goals and the WIMI Virtual Advice Team will support our customers in reaching that goal:

  • - Absa Law for You
  • - Insurance and Risk Protection
  • - Savings and Investments
  • - Wills and Trusts

How does Future Rental Income work?

Where there is a need for Future Rental Income to support the applicant’s affordability assessment and where proof of the expected Future Rental Income cannot be provided by the applicant at time of application, an estimated market related Future Rental Income may be included in the income calculation on the application. Our credit team will then assess this for inclusion in the applicant’s affordability assessment.

As is currently, where the applicant has existing lease agreements to prove rental income and as such, where an applicant is able to provide evidence of existing rental income, the applicant must provide evidence in the form of a copy of a signed existing lease contract/agreement with supporting six months bank statements, evidencing the last six rental deposits.

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What’s included and excluded?

In terms of property types, the property can be an existing or new residential dwelling, excluding Small Holdings, Vacant Land and Building Loans. For Future Rental income to be used for the Absa Buy-to-Let Home Loan application, the applicant/s must be purchasing their 3rd or more residential property.

Other Home Loan product exclusions include Private Bank Universal, First Time Home Buyers and Commercial Home Loans

Please note: the existing two properties can be either the applicant’s primary residence and/or other residential investment property at Absa or another bank.

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