Real Estate Investor Magazine South Africa August 2015 | Page 10

Q&A

ASK THE EXPERTS

Neale Petersen
Allan Bransby asks:
I have two investment properties
which I am letting out. I am
following the buy-to-let model.
When is the right time to invest
in a third property to add to my
portfolio?

I

n reality a bond, mortgage or home
loan is not a money ‘loan’ but a line
of credit that has been awarded
to you by the bank. They are purely
allocating you numbers on a computer
screen which you are liable to pay
back according to the agreement. The
bank reflects this ‘loan’ as an asset on
their books when in fact it is a liability
although many investors incorrectly
reflect it as an asset. Therefore given this
scenario it is important for the banks
to ensure that whatever ‘loan’ amount
they cede to you that it is with [