Link: http://www.property24.com

There are a number of different motivations for purchasing a sectional title unit as an investment.

Are you investing for capital growth or rental returns? Perhaps you are investing for both? Are you interested in buying an old apartment, fixing it up and selling for a profit? Are you buying a vacation unit as a lifestyle investment? Are you buying a retirement unit to secure your retirement plan?

One cannot offer advice for all these variables in one article, but we can look at a few aspects of the physical building to look out for regardless of your objectives. We can also look at a few ways of adding capital value to your unit with very little effort.

First things first: finding out information about a unit from the estate agent alone is not enough. Ensure that you speak to the chairman of the body corporate (BC) or the scheme’s managing agent to find out if the scheme has any of the following problems.

Spalling – Concrete reinforced structures use steel reinforcing bars to strengthen the structure. Spalling concrete is largely due to a natural deterioration process called carbonation, in which the reinforcing steel rods embedded in the concrete slab corrode, causing the concrete cover to crack and bulge. Spalling in advanced stages is very expensive to fix, and will require a substantial special levy.

Read more »

Link: http://www.property24.com

With the residential property market still underpriced in relation to 2007/early 2008 values and with recovery in the property sector taking place only slowly, now is a good time to buy an older home and renovate.

So says Graham Leslie, MD of Greeff Properties, who adds that some of Greeff’s most successful property deals in the last two to three years have been those where the buyer has added significantly to the value of the home by upgrading it himself. “A much quoted principle here is that every R1 spent on a good renovation can, and often does, add R2 to R3 to the sale price.”

Those who buy expensive homes needing no repairs or improvements will often find that their capital appreciation rate is slower than that of a less expensive, but tastefully renovated, home, says Leslie.

Read more »

Link: http://www.property24.com

Many consumers aren’t aware that even a small additional payment into their home loan account every month can make a big difference.

“If you have a 20-year bond of R500k at an interest rate of 12,5%, and you increase your bond repayment by just R300 a month, you could pay off your bond almost four years earlier and save more than R200k in interest,” says Adrian Goslett, CEO of RE/MAX of Southern Africa.

Given the difficult economic conditions, however, many homeowners find their budgets stretched to the limit and should rather focus on saving on interest until the tides change.

In order to fast-track the repayment of your home loan with the aim to save on interest, Goslett advises homeowners to secure the best possible interest rate on their home loan. “Every 0,5% reduction in the interest rate on a home loan of R1m represents an interest saving of more than R85k on a 20-year bond. Even 0,1% will make a significant difference over the life period of a bond,” explains Goslett.

Read more »

Link: http://www.property24.com

The inventiveness of the crooks in the property sector is a subject on which developers and estate agents can talk at length.

“No sooner has one loophole been eliminated than another will be found,” says Paul Henry, MD of Rawson Developers.

The latest scam to come to his attention concerns the renting of attractive coastal homes over the summer holiday season.

“Typically, an advertisement will appear on an Internet site offering a home at a rate that is well below the norm – for example, R650 per day for a home at Stilbaai with beds for ten people. This will be accompanied by pictures of a home, which almost certainly does not belong to the advertiser.

“The enquirer will then be told that the property can be his for the period he had requested. But to confirm the booking he must deposit R1k in a certain bank account.

Read more »

Link: http://www.property24.com

Although buying off-plan has the big benefit of no transfer costs, it also holds some pitfalls of which buyers need to be aware.

Paul Henry, the managing director of Rawson Developers, has warned that there is always a danger that the final product may not be as good as the computer graphics and plans have led the buyer to expect.

He said there is also a danger that the specifications list will be vague and non-specific, thereby allowing the developer considerable leeway in his selection of the fittings and fixtures.

Another possible danger, said Henry, is that the contract can be open-ended as regards the time. “With bank finance hard to come by and banks insisting on a high percentage of sales before they advance money, projects can be held up for long periods before the first work begins on site.”

Read more »