Real Estate Investor Magazine South Africa February 2015 | Page 8
upfront
ASK THE EXPERTS Q&A
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Q Molepo Mahula Phoswane asks:
I will like to buy and sell houses and
own a bonded house. However, I do
not have enough money for a deposit.
Can I buy repossessed houses from an
auction and sell them for a profit?
A
Neale Petersen
of Real Estate Investor Magazine
answers:
I
f you do not have enough money
for a deposit then first start
building up your investment
war chest before you start investing.
While there are methods to invest
with little money; you need to have
the focus, the awareness, passion and
guidance from a coach to take you
there.
If you want to buy and sell houses
I suggest you sign up to become an
estate agent as that is where you can
learn the basics. It can be a great
learning curve for you to learn how
and where to invest as well. When
you start making some profits on
commission from the sale of the
property then you can start putting
that towards your war chest for a
deposit.
In South Africa, the only way you
can buy is from a sheriff ’s auction,
private auction or directly from the
bank or even the owner. This requires
a substantial deposit or upfront
commission to secure the deal.
Jaco Coetzee asks:
I want to buy my first investment
property. What criteria or checklist
can I use as a guideline for
identifying my first few properties,
in my chosen area in Johannesburg,
before I start crunching the numbers?
A
Dr Koos du Toit
of P3 Investment Group answers:
• Price: Make sure you are not paying
too much and qualify for the bond.
• Rental income: Must be near 1% of
the purchase price.
• Levies and taxes: These are
permanent costs; turning a good
investment into a poor one if they are
too high. Special levies are not a good
sign for your investment.
• Cash flow: Make sure you carry all
the costs that rental income might
not cover and have a small buffer
fund for unforeseen expenses.
• Condition: Check that the property
will not require extensive repairs.
• Area: Area must not be in decline,
have good rental agents and have
strong demand from tenants.
• Complex management: In a
sectional title complex, make sure
the comple