Category Archives: News

Making money from distressed property – Buying, Advice

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Location is a far more important factor than the condition of the property, says Levitt. “In fact, if you want to make money from distressed auctions, buy the worst property in a good neighbourhood, never the best property in a bad neighbourhood. 

“Bear in mind that you can improve the condition of the property, but you can’t change the location. The factors you should be checking on in the neighbourhood include safety, schools and transport links.’’ 

via property24.com

Good tips for those buying property on auction. If you know what you are doing, you can snap up a bargain on auctions, but if you’re not careful it might just cost you more in the end.

Homeowners sell up and rent to escape stress

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Homeowners sell up and rent to escape stress
http://www.iolproperty.co.za/roller/news/entry/homeowners_sell_up_and_rent

And 51 percent of those selling homes because of financial stress exited the home ownership market and moved into rented premises, according to the second quarter FNB estate agent home-buying survey.

Economic and financial stress and general pessimism has shot to the top of the list of key factors influencing the near-term expectations of estate agents, with 31 percent of agents citing this as a key issue.

This is where you might be able to find property at great prices. Homeowners under financial stress need to sell as fast as possible, and some will accept lower offers as long as their outstanding bonds are covered by the sale price. 

When is the right time to buy a home?

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When is the right time to buy a home?
http://www.realestateweb.co.za/realestateweb/view/realestateweb/en/page228?oid=83270&sn=Detail

Looking ahead, I do not believe prices of houses as a whole will come down. In East London the average price in practically every suburb has increased year on year, even during these past three difficult years. According to reports, residential property prices in parts of America are currently at the 2002 level. Our situation is completely different – we live in a stable market where, over a reasonable period of time, you can trust your investment. Take a leaf from any wealthy person that you know. Ask them how they made their money and don’t be surprised if they tell you that the bulk is from property investment. If you have been holding back wondering when to buy, you may be missing the right opportunity right now, it is as good a time as any, probably better.

Some good questions to ask yourself about the property you are about to buy. Also a key point is to know how much of a deposit you can afford, having a clean credit rating and a stable income. 

Where levy collection is a problem

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If trustees want to check on the standing of a managing agent, they should as a first step investigate whether they are members of NAMA, the National Association of Managing Agents and are registered estate agents holding a valid Fidelty Fund Certificate. They should also ask for references.

These steps will give the client peace of mind and serve at least as a partial guarantee that the agent is competent.

via realestateweb.co.za

Once again it proves valuable to do your homework beforehand.

Buy a home you will ‘love’

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Buy a home you will ‘love’
http://www.property24.com/articles/buy-a-home-you-will-%E2%80%98love%E2%80%99/12942

When you are buying a property, it’s important to find a home that not only offers good value for money and a good location, but is also a place that you will love living in. 

If you’re ‘shopping’ for a new home make a list of everything you want and don’t want in a home – and work out what it will really cost you!

There needs to be a balance, says Harcourts Africa CEO Richard Gray. “These days we find that many homebuyers are more focused on the investment potential of a property than on whether it meets the needs of their family.”  

He says that no matter how great the growth potential, if your home does not appeal to you and feel comfortable, it is very unlikely you will live there long enough for that growth to materialise and give you a good return on your investment. 

Investing in property ‘together’

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With home loans getting harder to get approved, one option is often to buy property together with a co-applicant as this will increase the chances of a bond being granted. The article below outlines some very important points to consider when you are not buying alone.

Investing in property ‘together’ 
http://www.lessor.co.za/2010/11/investing-in-property-together/

Shared ownership of property as a live-in home, holiday residence or ‘To Let’ investment is a viable option to finance your first property or to enter the property investment market. Whether you co-invest with a partner, spouse, friend or family, be sure to construct a solid legal foundation for this relationship.

An attorney should be consulted without hesitation to draw up a contract for every form of shared ownership, regardless of the investors’ relationship. This contract should specify roles, contributions and what should be done in the event that friendships dissolve, couples separate, one party sells, another wants to buy-in or an investor dies. A pre-emption clause ensures that when one party leaves the investment – for whatever reason – theirshare in the property will be offered first to existing shareholders and then to other parties.

How big should your property be?

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How big should your property be?
http://www.iolproperty.co.za/roller/news/entry/how_big_should_your_property

“Unless they focus on what they need rather than on what they might want, homebuyers are quite likely to end up with too much house.”

So says Harcourts Africa CEO Richard Gray, who notes: “In many countries, there has already been a significant move away from suburban ‘palaces’ to more compact homes that are more affordable, use less energy and are easier to maintain.

“And now we are beginning to see that trend gain momentum in SA, thanks largely to the strict application of the National Credit Act and the limits placed on initial affordability by the lenders’ almost universal insistence that homebuyers put down hefty deposits.”

“But there are several more good reasons for prospective buyers to be very practical when choosing a new home.”

The three main things to think about, he says, are the size of the stand, the size of the home itself and the need, if any for “extras” such as a pool, a second garage or even a garden shed.

Buying leisure property

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Buying leisure property
http://www.iafrica.com/articles/675445.html

The year-end holidays are drawing closer and more and more people are looking forward to enjoying some sun, sea and surf. There is no doubt, however, that while they are enjoying their end-of-year break, many will be tempted to buy a holiday home or apartment.

Although the temptation is big it is not a decision to be entered into lightly as investing in property is a long term commitment, warns Adrian Goslett, CEO of RE/MAX of Southern Africa.

“When investing in a leisure property it is important to make sure you are purchasing with your head and not just your heart.”

Before you decide to purchase a property you should know the detailed answers to the following questions – why are you buying the real estate in the first place and to what end? In other words, what end result does that property need to produce for you in the long run and is this a realistic expectation?

In order to answer these questions you need to do a bit of homework, says Goslett. He offers the following points that should be considered before any potential investor makes up their mind:

New court ruling on clearance certificates

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New court ruling on clearance certificates
http://www.realestateweb.co.za/realestateweb/view/realestateweb/en/page228?oid=65590&sn=Detail

The South African High Court recently found that according to the Municipal Systems Act, the indebtedness of a property owner with regards to municipal rates is limited to a two-year period preceding the date of application of a clearance certificate. The payment of amounts that fell due prior to the two-year period is not a condition precedent for the issuing of a clearance certificate.

In the matter of Real People Housing, the applicant, Real People housing (RPH) owned several immovable properties falling within the jurisdiction of the City of Cape Town, the respondent.

RPH had sold some of these properties and in order to effect transfer to the purchasers, required a municipal clearance certificate as contemplated in the Local Government Municipal Systems Act, issued by the City of Cape Town.

The Act provides that a registrar of deeds may register the transfer of a property, only if he or she receives a clearance certificate issued by the municipality in which that property is situated. The certificate confirms that all taxes and fees due in connection with the property “during the two years preceding the date of application for the certificate have been fully paid”.

(via Instapaper)

How CPA will injure landlords

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How CPA will injure landlords
http://www.property24.com/articles/how-cpa-will-injure-landlords/12355

The Consumer Protection Act (CPA) will unleash a litany of woes for buy-to-let investors and rental managing agents if it is implemented in its entirety on 25 October. 

The first increment took effect on 25 April 2010.

The Act imposes onerous constraints on landlords whilst empowering defaulting tenants and even threatens the democratic right of investors to charge a market-related rental.

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