How to be a property investor pro
One of the many reasons why direct property investment consistently produces superior returns is the fact that it allows an investor to retain firm control of his or her investments.
In doing so, he says these investors relinquish responsibility for their money and their financial future. “They have absolutely no control over their investment and can do nothing to influence the performance of their investment, except to hope that this third party will deliver on the promises made."
On the other hand professional property investors, explains du Toit, have empowered themselves with knowledge of how property investment works.
Pitfalls of selling property privately
Those who choose to sell their home privately should do so with their eyes wide open to the potential pitfalls that can arise.
Such sellers will be tempted to go the DIY route and try to sell the property on their own, he says.
Without discussing whether this is a wise move or not, but assuming the seller does go it alone, Clarke has some words of advice for those choosing the private selling route.
He says the first piece of advice is to recognise that the private seller is targeting a different market.
“The buyer who goes to an estate agent recognises that he will probably have to pay a market related price and is possibly up against other buyers.”
They have informed me that only 20% attendance is required to pass these resolutions.
This seems strange to me as these are enormous decisions. I would appreciate your comments.
Be wary to pick the right rental agent
With finance for residential property purchases still hard to come by, demand for rented property has improved greatly and buy-to-let investors are again evident throughout the Cape.
Steward says very few property investors are able or willing to find and manage their tenants themselves and have to rely on rental agents to do this for them – for better or for worse.
Rental agents as with any other group, she says, vary greatly in dedication and ability - some are excellent while others really should not be in this line of work at all.
She says before an investor appoints a rental agent, he should make certain that the person has a track record of checking on and assessing tenants’ previous rental and credit history. Any tenant who has been blacklisted by credit bureaux should be suspect as should any who have fallen behind on previous rent payments or been disruptive in their communities.
Beware of cash strapped builders
With prices of between 10 and 20 percent lower than those charged by builders in 2009, developers are eyeing commercial property developments.
“If you were thinking of building, now is the time to do it without a doubt.”
He warns that developers must ensure that they choose a builder who is financially sound and will not go bust before completing the project as a large number of builders are currently under financial pressure.
Business rescue tricky for landlords
The ‘business rescue procedure’ now made possible by the Companies Act for ‘financially distressed’ companies is likely to be used with increasing frequency in the next year or two.
At the same time, any affected person may apply to court to place a business under business rescue.
The business rescue procedure, says Watson, cannot by law be implemented if the company’s finances are in reasonable shape or there is no real prospect of it being rehabilitated. Furthermore, the procedure may be cancelled if the requirements set out in the Companies Act relating to such procedures are not strictly complied with.
Home sellers warned to keep promises
South African estate agents are warned to ensure there are no deceptive phrases in sales documents as stated in the Consumer Protection Act (CPA).
It is particularly insistent that people with limited education or speaking another language should have all agreements carefully explained to them.
Anton du Plessis, chief executive officer of Vineyard Estates, says a recent High Court case (Guthrie and Another vs. Etango Game Lodge and Another) shows just how careful sellers must be in making promises they may not be able to keep – whether this is done in the official sales document or the property’s advertising.
6 misconceptions about home loans
Information on how to apply for bond finance to help purchase a home has been disseminated by SA’s banks and bond originators in a steady stream for some years.
Lawrence is now in the process of distributing a short memorandum on this subject to Rawson Properties’ 146 franchisees countrywide. He says this should “help scotch some wrong ideas” on the part of aspirant home buyers and avoid wasting unnecessary time in the home loan application process.
Entitled “Six common misconceptions about home purchase finance”, Lawrence’s memo lists the following as beliefs that most commonly lead to problems: