Block 2: Make the
Auditor General Your Friend The delivery of quality services by municipalities is at the heart of well-functioning local economies. Unfortunately, we know well we cannot take such service delivery for granted in South Africa. Would you rather invest in a property in a Municipality that is functioning well or in one where service delivery is collapsing? Let the Annual Report by the Auditor General be your free research tool to ascertain where exactly Municipalities are performing and where they are not. NB: Midvaal was the best one in Gauteng last time I checked the report, Emfuleni was pretty awful, and the Western Cape is leading by example
Block 3: Use the
Power of Slip Streaming As a keen cyclist, I know the benefits of“ slipstreaming”. How can we do the same with Property? Well, when the big money gets into action mode, don ' t be asleep. Monitor and learn where the big residential and commercial REITs are deploying new money. Know where Public Private Partnerships are taking place and where massive new construction projects are awarded. Such types of large, fixed investments are often very likely to create a positive endowment and spill over effect in the surrounding areas and properties. Get into the slipstream of big money and find opportunities for yourself without the grind of doing your own research.
Block 4: Monitor Replacement Cost The property market, like any other market, is all about supply and demand and supply is a function of both existing stock and new stock being new build and new developments. Builders and developers need to make a sustainable profit in order to continue to bring new stock to the market. So, how do the prices per square meter compare beween existing used stock and current building costs? Where new supply is lacking due to the economics, a long-term cycle of appreciation is surely brewing. Be patient and you will reap above-average results. That’ s why I like to invest in areas where there is no new competition.
Join one of our educational programmes and masterclasses to get access to the full area scorecard and more details.
Ultimately you might want to consider this:
• Avoid investing with emotions and follow a systematic process.
• Don’ t be a“ jack of all trades and a master of none” and rather develop deep area expertise in one or two areas and investment types.
• The rear view mirror does not make for a great investment tool. Think about the future and its mega-trends like mass urbanisation and green economy that will drive the Property Market for many years ahead.
No matter what area you will ultimately focus on, it is highly advisable for you to build local and practical knowledge about investing in property. Find out what tools you need, develop a support team around you and don’ t let perfection get in the way of action. Mzansi, the right time to invest in property is now.
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SA Real Estate Investor Magazine APRIL 2021 31