Real Estate Investor Magazine South Africa March 2013 | Page 18

COVER STORY
team of estate agents or property investment
groups a lways on the lookout for great
opportunities.
Our investors are very thorough and patient
in their search for just the right property, doing
thorough due diligence and research. Some
study reports like Lightstone and WinDeed
to establish the true value of a property. They
conduct thorough investigations of the property
and check the financial statements of the body
corporate and determine the rental, before
making an offer.
A number of the entrants also highlighted
the importance of selecting properties using
common sense, not emotion. They apply a
business-like approach considering the financial
vitality, including a yield above inf lation,
the condition of the property to ensure low
maintenance, as well as the location in terms of
proximity to schools, shopping malls and main
transport routes.

Research and knowledge
A common trait among our investors is ongoing
research and a quest for knowledge. Some have
spent years researching personal f inancial
management and investment strategies, while
others have invested a great deal of time and
money to attend seminars, read books, do
research and apply their knowledge in practice.

Support structure

It is telling that almost all the entrants
have support structures in place, ranging
from mentors to full teams of propert y
professionals to assist them. These teams, in
most cases, include an estate agent, attorney
and rental agent, but in some cases also
include maintenance teams and auditors.

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March 2013 SA Real Estate Investor

What is clear is that our investors have spent
time and effort to find professionals who are
honest and trustworthy and have built up solid
relationships with them.
A number of them continue to rely on the
expertise and experience of property investment
experts. Names that cropped up repeatedly
included Gordon Mackay, P3 Investment
Group and IPS.

“A common trait among
our investors is ongoing
research and a quest for
knowledge.”
Capital investment
Another striking similarity among the entrants
is the fact that they have all built their portfolios
w ith minima l investment of their ow n
capital, obtaining bonds for all their property
acquisitions. Most mention that it is only
recently, due to the banks’ strict lending criteria,
that they are investing their own capital to
cover the required deposits. They are, however,
all quick to point out that they consider this a
sound and worthwhile investment they are
absolutely happy to make.
A number of entrants reported proudly that
they have made the all-important mind shift
from being conservative and avoiding any debt,
to being smart and using as much “good” debt
as possible, without over-gearing. “Good”
debt, our entrants agree, is the kind of debt
that allows them to acquire assets that will not

only appreciate in value, but will also generate
ongoing income.

How our investors started
Not a single one of our investors started with
anything more than guts, sheer hard work and
determination.
One of the entrants tells of how he and his
wife held five jobs between the two of them in
their quest to save up a deposit for their first
property. Another explains how he held down
multiple jobs while living with his parents,
which allowed him to acquire rental properties.
He also added rooms to his parents’ house to
let out for additional income. Another investor
tells us that their first investment was also their
main residence, half of which they rented out to
pay off the bond in record time.
Others started their own businesses and,
realising they were paying too much rental for
the business premises, began investigating the
possibility of becoming landlords. Some simply
stumbled upon property investment by chance.
For one investor, his property portfolio started
with an act of good-heartedness: “I bought my
second property – a two-bed flat in Arcadia,
Pretoria - because my girlfriend at the time, she
is now my wife, was ill-treated by her landlord
and needed a place to stay. When I later sold
the property and made R100 000 profit, the
estate agent asked if I was buying and selling
for investment – a question that changed
my life. My journey of property investment
intensified from there.”

Why property?
Many of the entrants are completely and utterly
convinced that buy-to-let property investment
is the way to create wealth. M ???bF?V??fP??&VG?6V7W&VBF?V?"&WF?&V?V?B?'&??v??rF?V?V??F6?VBV6R?b??B??'WBF?W???fR&?W'B?f?"????F?W ?&V6??2?( ?B?2F?RV6?W7B'W6??W72F?7F'B??@?F?W2??B6??b?7Bv?F??gV???F??R??"?@?&WV?&W2?GF?RF??RF???vR?( ?6???V?G2??P???fW7F?"???F?W"FG3?( ?&?W'G???fW7F?V?@????w2?RF?W6R?F?W"V??^( ?2???W??@?F??R?????r?BF?RV6?W7B?B??7Bff?&F&?P?v?F???fW7B?( ??F?W'2?V?F???W&?27V6?0?F???r6??WF???rF?B?2gV??BF?BF?W???fP?F?F??F?R??7&VF?&?R?vW"?b76?fR??6??R???BF?R&??G?F??VfR?Vv7?F?&?Vv??&?W&?7G'V7GW&VB&?W'G??'Ff????B?2V7?F?V?FW'7F?Bv???W"??fW7F?'2&P?wwr?&V??r?6??????