Real Estate Investor Magazine South Africa September 2015 | Page 10

Q&A ASK THE EXPERTS I currently own three properties, including the one I live in. I want to register a Trust and transfer the other two properties into it. What factors must be considered when transferring fixed property into a Trust I am currently invested in property myself, I have 2 flats, which are doing well at this stage, but I am hungry for more knowledge and networking with like minded people. Is there some sort of vehicle, workshop, course, networking group whether online or contact based (based in Gauteng, preferably Pretoria) that you could perhaps refer me to as I would like to learn a lot more about the investment aspect of property. Meyer De Waal of My Budget Fitness answers: W hen you transfer your own property to a trust, SARS will levy transfer duty on the fair market value of the property and they will demand two “fair market” valuations issued by independent estate agents. I assume the purchase price will not be paid by the trust and will remain in the form of a “loan account” due to the seller. You can consider to donate a R100 000 per year to the trust in the following years to come to enable the trust to pay off the balance of the purchase price due. If you have a current bond over the property, you need to cancel the existing bond and reapply for a new home loan. Consider the current interest rate compared to what the banks offer now. If you intend to keep the property for a long time, the trust may be a good “option”, but not if you want to dispose of it soon. If the properties are bond free, and generating income, consider to first transfer it to a company, with a trust to own the shares in the company, as there a certain income tax advantages when you repay your loan account form the net income of the trust. Best to get tax advice from your tax advisor. Ask The Property Experts click here 8 Neale Petersen Y of Real Estate Investor Magazine answers: ou are absolutely right about wanting to invest and network with like-minded people. This is a key success factor for any investor worth his salt. There are lots of good and bad courses, seminars and workshops that you can attend and I suggest that you attend as many as you can so that you can get an idea of what is on offer from the market and what is best for you. Be careful of those that are hellbent on selling you negatively geared properties so that they can make a sale. Any property you buy must be cash flow positive from day one, be geared and have a twist on it otherwise don’t invest. We offer all of those seminars with the best professionals in South Africa including SA’s no. 1 property economist Erwin Rode. We cover residential, commercial and offshore investing insight that is unmatched out there. Make sure that you attend those events. In terms of knowledge I hope that you are a regular reader of REIM as that is the best place to start, then I would suggest that you read as many books as you can on property investing both local and international. Getting a good grounding and then a good mentor is key for your success as you now need guidance and direction as to why, how and what you do. Once again choose your mentor carefully my suggestion is that they don’t necessarily need to be in your city but should be South African. The Amercans or British don’t have a grasp of the opportunities and processes in the local markets other than their own back yard. We offer that service as well. DO YOU HAVE A PROPERTY QUESTION YOU WOULD LIKE ANSWERED BY OUR EXPERTS? If so, post it on ASK THE EXPERTS on www.reimag.co.za or email [email protected] SEPTEMBER 2015 SA Real Estate Investor www.reimag.co.za