Want money? Buy commercial property
Property investors looking for good returns should rather buy commercial property than residential property as investors achieve fewer returns.
This is all thanks to the wake of the economic recession that has seen residential properties being hard hit and in some cases, forced to sell at comprised prices.
Len Pears director of Quagga Property Brokers says the commercial and more so the industrial market has been least affected, making it a good investment for those looking for good returns. Pears says buyers of commercial property need to know that when buying commercial or industrial property, one needs a far bigger cash input than residential property. Most banks are also prepared to lend between 60 and 70 percent of the purchase price to qualified buyers.
Auctioneers speak out on allegations
Allegations of unethical practices by a leading SA auctioneer have created the impression that such practices are widespread in the auction world.
She explains that all bidders or potential bidders who come to a Rawson auction (which is usually held on site) are required to register at the outset and the registration list is always available for inspection.
When a buyer asks what the reserve price is, she will always reveal it, she says. “I firmly believe that it is in both the buyer’s and the seller’s interest to know what the reserve price is.”
She explains that she also accepts that it is the auctioneer’s duty to justify all prices to sellers and buyers by being able to compare them with those of similar properties sold in the area.
HOAs must get their 'houses in order"
The new Companies Act is proving a minefield for many Homeowners Associations whose roles and rules may have been hastily and haphazardly cobbled together, and who must now lodge and register a formal Memorandum of Incorporation.
Constas explains that a Homeowners Association is the body that governs a cluster development, and that any cluster development that comprises five or more freehold homes should have its Homeowners Association registered as a Section 21 company. Marina Constas, specialist property attorney and a director of BBM Attorneys, urges Homeowners Associations to use the requirements of the New Act, which came into effect in May last year, as an opportunity to, quite literally, get their houses in order.
Constas explains that a Homeowners Association is the body that governs a cluster development, and that any cluster development that comprises five or more freehold homes should have its Homeowners Association registered as a Section 21 company. In the past, many Homeowners Associations were set up very informally, she says. “If they were registered as Section 21 companies (and some were not), they were required to have a Memorandum, which set out the purpose of the company, and an Articles of Association, which set out the rules.”
Damages - landlord or tenant to pay?
If problems arise with rented properties, especially those in the residential sector, they frequently revolve around maintenance issues. In most instances it is the landlord's duty to see that regular maintenance keeps the unit attractive and habitable, he says.
However, he explains unless otherwise stated, it is also widely accepted in rental agreements that the tenant has to keep the premises clean, look after the garden (and the pool if there is one) and carry out repairs on any damaged or spoilt sections of the building where he has been responsible for the problem.
Asked for examples, Clarke says that if a tenant cracks an oven door, blocks a drain, breaks a window or fails to mow a lawn he can legitimately be warned that it is his duty to do so within a reasonable time span. The tenant can also be charged with resultant damages due to neglecting to carry out such maintenance.
Overcrowding - eviction the wisest course
Landlords in South Africa, as in many countries in which poverty is still the lot of a large proportion of the population, may from time-to-time find themselves facing the awkward situation of tenants allowing too many people to move into their unit on medium- or long-term arrangements.
He says such rules are difficult to apply to one-off short-term occupancies, as for example when friends from upcountry come to stay for a few days or even a week or two. “What is, however, totally illegal is for tenants to accept excessive numbers over lengthy periods and then, as is often done, to charge rents in return for the space occupied."
This practice, he says is particularly prevalent on the fringes of major cities such as Durban, Johannesburg and Cape Town.
Why we love South African properties
South African house prices are said to be performing much better compared to other markets around the world, according to estate agents.
The report showed that South African house prices rose 5.5 percent and has therefore almost kept pace with inflation, he says.
“However you look at it, this shows a renewed consumer confidence and a continued faith in residential property by the man on the street,” says McCauley. Worldwide, house prices closely reflect the economic situation in their region and the country.
Soundproof against noisy neighbours
With the increase in townhouse and apartment living, many homeowners share at least one wall with their neighbours.
With single brick construction between dwellings, noise may be carried and heard in the apartments or homes next door.
The good news is that there are ways to soundproof your abode to reduce the amount of noise that you have to put up with. Blocking noise via walls Where one townhouse or apartment is joined to another, the main point of noise disturbance travels via the walls. If you own your dwelling, one of the easiest ways to reduce sound is to add just a single layer of drywall to your existing walls.
Add two layers and your walls will block out even more sound, so much so that your neighbours could invite a rock band round for a party and you'd barely notice.
A rented townhouse or apartment is not quite as easy, but there are still ways to reduce noise levels. In a tiled space, simply adding a few thick rugs will help to absorb sound, as will thicker curtains and tapestries hung from the walls. In fact, the more padding you can add to a room, the more the sound is deadened.
Renovating - what should you spend?
When thinking about renovating, homeowners often ask themselves “how do you know if you are spending too much on renovating your home?”
Many worry that that over-capitalising means they may not recoup this additional capital outlay when re-selling their property at a later stage. This is particularly relevant if the intention is to sell in the next few years, and is also impacted by the existing economic trading conditions and status of the property market.
Carol Reynolds, Pam Golding Properties area principal in Durban North and La Lucia, says the first step is to verify the ceiling price for the area in which the property is located. If the area has a relatively low ceiling, she says clients are advised to spend very little on upgrading their homes. “If they pursue extensive renovations in an area that does not carry sufficient value, they run the risk of over-capitalising.”