EDITORIAL VIEW
EDITORIAL VIEW
Follow the money where it treats you best
At REIM we believe that investing in real estate is the best wealth builder there is and the surest road to financial independence . The savvy investor knows that investors and are always looking for investments that offer them the best returns with the least amount of risk . Most South African investors don ’ t achieve this as they have a fundamental belief that the residential property they live is a good enough investment to retire on one day . Most part-time investors look at capital growth only . We only have to evaluate the cost of finance , bond mortgage interest , transactional costs such as transfer , legal fees and maintenance costs to see how expensive it can be to invest in a house . The pitfalls of investing like this can cause long-term financial expense as opposed to cash flow on your balance sheet .
The first thing to realize when you invest is that greed is not good so ensure that you invest for reasons other than just making money . The second thing is there is no such thing as an instant return so ensures that you do a proper due diligence on your investments yourself in conjunction with experts before you commit . The Third lesson is don ’ t fall for high-pressure sales tactics from property promoters . You never buy on emotions on any deal , always do a thorough comparable market analysis before you buy .
The best way to succeed as a private investor is by finding your own properties for renting and not living . You can do this by doing your own diligence or management by walking around or by inspecting the properties yourself . In addition to that investors need full-service rental management that is transparent and accountable . This of course takes both time and money to find the right property managers but it will all be worth it in the end . Being part of a reliable network or group of investors can move you quickly from theory to practice .
Local investors who want to invest offshore must have a reliable team on the ground to help them along . We invite you to read about how leading new generation offshore investors use this strategy to their advantage . Offshore investment into residential real estate in the United States and the United Kingdom offers far more currently than is available in the South African market right now .
For example cost of finance is cheap in both those countries . Today it is possible for a South African to get a mortgage fixed for 20 years at around 5 % interest rates for example . Transaction costs is lower than SA and more importantly rental returns are more flexible and are far higher with specific investment categories such as House of Multiple Occupancies ( HMO ’ s ) in the UK for example . The US has had solid house price growth of more than 10 % per year in areas such as Dallas . Your capital and income growth is in a more stable dollar or sterling currency which helps give you a hedge against the fledging rand . This issue offers brand new modern investment insights so read all about it inside and implement it in the market .
Successful investing
NEALE PETERSEN
FOUNDER & PUBLISHER
“ Think twice before you speak , because your words and influence will plant the seed of either success or failure in the mind of another .” NAPOLEON HILL
www . reimag . co . za NOVEMBER 2016 SA Real Estate Investor 3