Real Estate Investor Magazine South Africa June 2015 | Page 8

Q&A

ASK THE EXPERTS
Derick Laing asks:

I am planning to buy my third
property. Will I get finance from the
bank? Are there any other financial
vehicles I can use to get access to
finance, owing to the 30% limit by the
Credit Act? Must I buy a property as
a legal entity?

Elton Stevens 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?

Neale Petersen

of Real Estate Investor Magazine
answers:

G

etting finance from the bank all
depends on a number of factors.
The bank will see multiple
mortgage bonds as high risk as they
are visible to them in your own name.
Your chances of getting another bond
are slim.
The cash flow you are earning does
present a personal tax risk if it is in your
own name. When you are employed by
a company, unless you are consistently
earning more than R1 million annually,
you will always be limited by the
amount of finance you can get from the
bank
You need to remove all risk from
your own name and put all your assets
in a trust. Things can go wrong when
investing in property and you need to
protect yourself.
You need to find a good yielding
property (view at least 100 properties!).
Then, present your case to convince the
bank directly that the investment makes
financial sense (i.e. low price, great
rental yield).
You will need to create an investment
trust, if it is a residential property, to
move your assets out of yo