Link: http://www.property24.com

Listed property has always been an excellent investment.

But the prospects for the nearly 20 listed property funds are currently less than positive.

Investors will therefore have to be very careful and more selective.

Coronation Fund Managers says listed property has offered investors a firm average return of 23,2% per year over the past 10 years. This makes listed property the asset class that has fared the best during this period – even better than local shares (17%).

But what about the next decade?

Coronation’s forecast is a return of only 9% to 10% per year – lower than the forecast for local and international shares alike and a tad higher than for unit trusts.

This does not mean that listed property is no longer a good investment. But investors will have to lower their return expectations.

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Link: http://www.property24.com

Worldwide, the sub-division of large residential stands is gaining popularity – and presents good opportunities for property investors.

So says Harcourts Africa CEO Martin Schultheiss, who points to new figures from the UK Department for Communities and Local Government that show 25% of new British homes are now being built on subdivided existing residential land, including many “back gardens”.

“And although no hard figures are available locally, the trend is also visible in South Africa and the reasons are plain: Land is becoming scarcer and it is often cheaper and easier to build in developed areas because of existing infrastructure.

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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.

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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.

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Link: http://www.property24.com

Controversy still surrounds the terminology “effective cause of the sale” in property documents, as different interpretations are often attached to these words.

If the right meaning is not ascertained, it could hit the seller’s pocket hard.

“Sellers should take note that property attorneys in South Africa have given different interpretations to these words,” says Lanice Steward, MD of the Cape Peninsula estate agency, Anne Porter Knight Frank (APKF).

One interpretation, said Steward, is that any agent who introduced the buyer to the property or to the seller can claim to be the effective cause of the purchase if and when that same person eventually buys the property, whether or not they have kept in contact with the buyer.

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