Real Estate Investor Magazine South Africa February 2014 | Page 8

ASK THE EXPERTS Buying Under A Million Q Laurie Wener Pam Golding Property Group www.pamgolding.co.za Angelique Swanepoel Asks: Retail Investment Q John Engelbrecht JHI www.jhi.co.za Themba Sisulu Asks: Buying In Europe Q Jenny Ellinas Cypriot Realty www.cypriotrealty.com David Louw Asks: I am looking at investing in a small flat for around R500 000 to R750 000, how can I get the best deal possible on an investment like this? Do you think commercial property will pick up this year? In light of decreased spending how can I, as a retail investor, make sure my business doesn’t suffer? Where are the best countries to invest in offshore this year, will the European market become a good investment again? A A A Laurie Wener Answers: Firstly it is a good idea to select the area correctly. A small apartment for buy-to-let should be in an area which has a healthy demand to rent. Colleges, universities and hospitals are just some of the institutions which create consistent demand. Seaside places are always popular and may offer the opportunity of short-term rentals during the summer season when they can command good daily rates. Secure parking is a substantial benefit and important, in most areas, for good investment growth. Familiarise yourself, via a reputable agent, with recent sales prices in the area and in specific blocks or complexes so that you can understand current market value. Bargains in good areas seldom occur so the best you can aim for is fair market value. Be sure to understand the costs of purchasing. You will, as the buyer, have to pay for all the associated costs of transfer including transfer duty on any amount you pay over R600 000, the costs of acquiring and registering a mortgage loan and any improvements you may have to make to the property to ensure it attracts a good tenant. John Engelbrecht Answers: I believe that if the retailer understands his/ her market and the customers’ needs within that market well enough, that they should continue to ensure that there is an availability of product in a fair range of choice at all times. The width and depth of any retailer’s product range are important for any retail product strateg y and are instr umenta l for their comparative and competitive advantage. For sustainable growth there is unfortunately no compromise for the proviso of providing value in the product – in other words acceptable good quality at affordable prices. Having said that we believe that the December 2013/January 2014 festive trade will be on a par with the previous season (December 2012/ January 2013) and no ‘fireworks’ are expected. We also do not anticipate that the year 2014 will experience unrealistic growth from a consumer spend perspective. Jenny Ellinas Answers: It looks like the long recession in Europe is over. With the Germans backing Engela Merkel and her support of Europe and the European economy, GDP growth overall is on the up and stronger profits from companies will start positively impacting local economies. This bodes well for the real estate market. The biggest challenges in investing in Europe are the volatility of the ZAR; ascertaining when the best time is to hedge your currency and to be clear on your short, medium and long-term plans. Things to take into consideration before investing are to look at all of the costs involved in owning a propert y: the upfront costs like transfer duties, legal fees etc. as well as ongoing amounts like municipal rates and taxes, utility costs, personal tax implications etc. And, if you’re renting your property out, you need to take into account the demand for short and long-term leases as well as the management fees. Do you have a property question you would like answered by our experts? If so, post it on ASK THE EXPERTS on www.reimag.co.za or email [email protected] 6 February 2014 SA Real Estate Investor SUBSCRIBE www.reimag.co.za