Real Estate Investor Magazine South Africa May/June 2015 | Page 35

the taxman more than you absolutely have to. There are
many ways to keep your tax bill down, and you must
take full advantage of them if you want to achieve
maximum capital growth.
6. Exploit local knowledge
It sounds obvious, but when buying a property, it is
not going to be easy to spot a bargain from another
city. Research the property and the neighbourhood.
Ask questions to find out if the property is reasonably
priced, about schools, transport and other amenities.
7. Start at home
Are you nearing retirement age and living in a tired and
dilapidated family house that is too big for you? Then
consider breaking it up into two or three apartments.
You can keep the ground floor for yourself and use
the others as the first building blocks in your property
portfolio.
It makes obvious financial sense to release some
equity from your biggest asset, and you will be well
positioned to oversee the newly created flats.
8. Find professional partners you can trust
Unless you are a financial wizard with a law degree and
advanced DIY skills, you are going to need professional
help in building your property portfolio.
Pick the right partners with expertise in their
chosen field. Finding dependable builders, lawyers and
accountants is not only the key to maximising your
profits, but will offer you peace of mind too.
9. Is there cash in your attic?
If you are thinking of selling your main home to raise
capital and kick-start your portfolio, consider making
value-adding improvements. Assuming you have not
employed a cowboy builder, an extension can add five
to 10% to the value of a property.
10. Take advantage of low mortgage rates
Turning an initial investment of R200, 000 into a
R1 
million portfolio is certainly achievable if you do
your homework. One possible strategy is gearing.
Property unlike other assets can be geared by means
of a bond, therefore increasing the investors return on
their c