Residential Guidebook Residential Guidebook 2014 (Subscribers) | Page 13

Do your homework It is important to identify the geographic areas is normally sold ‘voetstoots’ (although the seller is obliged to advise you of any patent defects about which Experienced estate agents are an excellent source of information and will gladly assist with your research and help determine a reasonable value for the property in which you are interested. There are also several websites which you can access to find historical information on registrations and pricing. In the case of a sectional title property, examine the latest audited financial statements carefully, and study the accompanying budget for the ensuing year. If in doubt, talk to the managing agents of the body corporate about potential special levies or other major costs to come. This is especially important in old buildings where ‘big ticket’ repair items are a reality. which will maximise your capital growth and rental yield. Obviously your budget will determine the price you are able to pay and therefore the sectors in which you will be looking. Because of a shortage of rental stock in most suburban areas excellent rental yields are being achieved, in the range 5% to 9% (ungeared). Your research should cover suburbs which are growth areas for reasons of shifts in demography, eg Umhlanga where there has been an injection of business from the City Centre, or eMdloti, much sought after for holiday homes, and because of its convenience to the new King Shaka Internatinal airport. Equally importantly, identify the LSM category toward which your rental property is targeted; a quality rental agent will be able to assist here. Before presenting your offer, carefully inspect the property for any defects. As immovable property he is aware,) it is a good precaution to make your offer subject to a qualified building inspector’s report. Location, location, location Conventional wisdom is that it makes better investment sense to purchase a more modest home in an excellent area than the best house in a lesser area. This has proven to be true time and time again. Examples in sought after areas such as uMhlanga/ eMdloti abound with excellent capital growth having been measured over time. Other factors to consider, all of them adding to the potential value of the investment are closeness to schools and other amenities, ease of access to major freeways and airports, and security such as in a gated estate or where an independent body such as uMhlanga UIP (uMhlanga Improvement Precinct) operates which augments municipal offerings by providing services such as cleaning, greening and security. Umhlanga, KZN www.reimag.co.za Residential Handbook 2014 11