Real Estate Investor Magazine South Africa October 2015 | Page 14

MASTER INVESTOR
Offshore investment options for South Africans
Dolf sites a number for reasons for not investing in
property throughout South Africa, chief of which
being the decline of the Rand over recent years. “If
you look at the Rand over the past 15 years next
to US and UK currency, there is a linear decline of
around six to seven percent a year and no evidence
on the horizon that that decline is going to come
to a halt and reverse itself ” he says. If we assume
that things will go down by six percent annually,
then there would have to be an upswing of at least
a further six percent just to stand still and cover
the investment costs. He is also keen to emphasize
the effect that nationwide load shedding has had
in shaking the confidence of prospective investors.
Dolf has always been a large supporter of offshore
investment, reasoning that investment overseas
gives your a hedge against a falling currency and

falling economy. While spreading your money
across the Continents may sound risky, keeping all
your eggs in one basket opens you up to as many, if
not more so risks. While investing solely at home
may have been sensible 50 years ago, when the cost
and effort to get to another country was enormous,
in this day and age, when you can get on a place and
be anywhere within 24 hours, the opportunity for
offshore investment is at your feet.
Shipping your money overseas is often seen as
being dishonest to your country, but, according
to Dolf, by successfully investing your money
overseas you bring the fruits of those investments
back into the country and ultimately any capital
grown that comes with it. In the case of a weaker
home currency, you are bringing a strong forgiven
currency into the country.

While Dolf is regularly associated with residential property investments, his personal interest lies more in Commercial Property, the secret of
which he says is to know to convert an ordinary building into an extraordinary income generator. The following are his eight golden rules for
commercial property investing.
1. Investing in commercial property is a totally different game
When you invest in residential property, you deal with people.
With commercial property you deal with contracts. This
requires a different level of advice and compliance in order to
protect both you and the tenant. It requires that you become
better educated. It requires that you have a good team of
professionals around you.
2. Fall in love with the deal, not the property
One to the biggest mistakes investors make when they buy
into an investment property (whether it’s commercial or
residential) is that they fall in love with the property. When it
comes to a commercial property, in most cases, the property
is only as good as the tenant and the lease. Without a tenant,
the property could be useless - or it could be an amazing
opportunity. It all depends on your education and experience.
3. Look beyond what the current use of the property is
Know your market. What else could the property be used for?
For example, could you pick up a warehouse with little structure
and build offices. Is the area zoned for some residential and
could you therefore redevelop the property and get a greater
return. The rent you can get on a commercial terrace house in
Sydney’s Paddington is likely to far outweigh what a residential
tenant will pay to rent the same property.
4. Be counter-cyclical
Don’t do what everyone else does! The most successful property
investors buy when everyone else is selling, and bide their time
when everyone else is buying. Right now, many residential real
estate investors are starting to look at commercial, that papers
12

OCTOBER 2015 SA Real Estate Investor

are hinting that while residential property prices are down,
returns on commercial are likely to remain healthy so if you want to get into the market, don’t wait until the
market is flooded with newcomers.
5. Always try to buy with zero or little down
For years we have been told by our parents to “pay off your
debt”. We have this natural inclination to want to get rid of
our mortgages. Putting [