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11 July 2013

Buying ST property – know the rules
Many security-minded South African homeowners have taken to living in sectional title homes due to the certain level of safety that this type of property provides, along with the fact that they are generally low maintenance.  However, Adrian Goslett, CEO of RE/MAX of Southern Africa,  says while there are benefits to living in these kinds of properties, problems can arise if homeowners are not aware of the fine print in the body corporate rules or don’t ensure that the sectional title scheme is in sound financial order.  

He says since its inception in South Africa, the sectional title model has proven to be popular, often outselling freehold homes in various regions throughout the country. “Aside from the fact that there is an increased security element within this type of property, other benefits of living within a sectional title environment include the shared cost of basic charges such as water and electricity. This usually means that these costs are lower than what a homeowner would pay in a freehold property.” 
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Top tips for buy-to-let investments
For many investors, buy-to-let property is still a great way to invest money, as indicated by recent reports.  According to the FNB Home Loans quarterly report, buy-to-let accounts for 8 percent of total residential property buying with More buy-to-let investors choosing KwaZulu-Natal (11 percent) followed by the Western Cape (8 percent)  and Gauteng (6 percent).

Ewald Kellerman, head of sales at FNB Home Loans, says Home loans for buy-to-let property as with primary properties are hard to get as banks are strict on lending following the global financial crisis of 2008/2009.

Property returns
Kellerman explains that capital growth or price appreciation of the property encourages buyers to invest for a potential future increase in property prices.

“This was a great motivating factor driving high levels of investment prior to 2007 when property prices growth contributed a large portion of the total return.”
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