Housing investments

[saturnz]

I will make as many unwarranted nasty comments to the OP as I feel, he should be able to receive what he gives.

 

[Billy]

Wait, that is almost double your investment in 5 years? Seriously?

I put 300K in AG Balanced in September last year. In July after 10 months i withdrew R60K.

I still have 300K in the account.

Beat that with housing!

 

[iDOL]

I put 300K in AG Balanced in September last year. In July after 10 months i withdrew R60K.

I still have 300K in the account.

Beat that with housing!

Agreed Billy

 

[CamiKaze]

I put 300K in AG Balanced in September last year. In July after 10 months i withdrew R60K.

I still have 300K in the account.

Beat that with housing!

shst...im definitely going for this.

 

[Gnarls]

^Just remember past success is no indication of future performance.

 

[saturnz]

I put 300K in AG Balanced in September last year. In July after 10 months i withdrew R60K.

I still have 300K in the account.

Beat that with housing!

I think you are missing the point.

How much of your own money did you put into that fund? Do you think a bank will lend someone the money to deposit into a fund?

Looking at property from a simple annual return point of view is extremely narrow and simplistic.

 

[Brenden_E]

I put 300K in AG Balanced in September last year. In July after 10 months i withdrew R60K.

I still have 300K in the account.

Beat that with housing!

Bought a townhouse for R645K 3 years ago. It's valued at R870K currently. And I got roughly R180K in rental profit from it during that time. It's close

 

[Gaz{M}]

I think to invest in property you should try to:

1) Make sure you can comfortably cover the entire bond, levies and maintenance on your own salary
2) Buy a brand new unit from the developer early in the complex phase (bigger discounts for the first few units)
3) Realise it is a long term source of inflation hedged rental income for your retirement and not a short term <7 year profit generator
4) Write off as many expenses from your taxable income and don't buy it cash.
5) Not be your only investment. Have others like shares, unit trusts and ETF's.

 

[TehStranger]

LOL @ 100k

you are mickey mouse dude, even with your 2m house and cars that are nearly paid up

What a historically significant post saturnz.

Tell us again about the glorious Delta Motor Corporation of South Africa Opel Monza 160i GSi car of the year 1991 that you were trying to flog here?

Tell us again about how many modern stock engines will do three times their stock power by simply upping the boost?

Please find a rock to go crawl back under.

 

[saturnz]

What a historically significant post saturnz.

Tell us again about the glorious Delta Motor Corporation of South Africa Opel Monza 160i GSi car of the year 1991 that you were trying to flog here?

Tell us again about how many modern stock engines will do three times their stock power by simply upping the boost?

Please find a rock to go crawl back under.

glad to see his fan boys coming out to play with nothing more than insignificant points to bring up

 

[surface]

I think you are missing the point.
How much of your own money did you put into that fund? Do you think a bank will lend someone the money to deposit into a fund?
Looking at property from a simple annual return point of view is extremely narrow and simplistic.

Indeed, I missed this point as well when I calculated somewhat paltry return on rental returns. Good one. Thanks.

 

[nakedpeanut]

Property can make you money. But you need to do your research. Buying it cash means you tying up all your money in one investment!

Just read this http://investorchallenge.co.za/whites-cant-own-land-in-zimbabwe-excellent/

In particular I love the quote at the bottom:

-It should be not just an initial, but if we do it right, a relentlessly ongoing drain on the cash reserves of the owner.
-It should be illiquid. We’ll make it something that takes weeks, no – wait – even better, months of time and effort to buy or sell.
-It should be expensive to buy and sell. We’ll add very high transaction costs. Let’s say 5% commissions on the deal, coming and going.
-It should be complex to buy or sell. That way we can ladle on lots of extra fees and reports and documents we can charge for.
-It should generate low returns. Certainly no more than the inflation rate. Maybe a bit less.
-It should be leveraged! Oh, oh this one is great! This is how we’ll get people to swallow those low returns! If the price goes up a little bit, leverage will magnify this and people will convince themselves it’s actually a good investment! Nah, don’t worry about it. Most will never even consider that leverage is also very high risk and could just as easily wipe them out.
-It should be mortgaged! Another beauty of leverage. We can charge interest on the loans. Yep, and with just a little more effort we should easily be able to persuade people who buy this thing to borrow money against it more than once.
-It should be unproductive. While we’re talking about interest, let’s be sure this investment we are creating never pays any. No dividends either, of course.
-It should be immobile. If we can fix it to one geographical spot we can be sure at any given time only a tiny group of potential buyers for it will exist. Sometimes and in some places, none at all!
-It should be subject to the fortunes of one country, one state, one city, one town…No! One neighborhood! Imagine if our investment could somehow tie its owner to the fate of one narrow location. The risk could be enormous! A plant closes. A street gang moves in. -A government goes crazy with taxes. An environmental disaster happens nearby. We could have an investment that not only crushes it’s owner’s net worth, but does so even as they are losing their job and income!
-It should be something that locks its owner in one geographical area. That’ll limit their options and keep ‘em docile for their employers!
-It should be expensive. Ideally we’ll make it so expensive that it will represent a disproportionate percentage of a person’s net worth. Nothing like squeezing out diversification to increase risk!
-It should be expensive to own, too! Let’s make sure this investment requires an endless parade of repairs and maintenance without which it will crumble into dust.
-It should be fragile and easily damaged by weather, fire, vandalism and the like! Now we can add-on expensive insurance to cover these risks. Making sure, of course, that the bad things that are most likely to happen aren’t actually covered. Don’t worry, we’ll bury that in the fine print or maybe just charge extra for it.
-It should be heavily taxed, too! Let’s get the Feds in on this. If it should go up in value, we’ll go ahead and tax that gain. If it goes down in value should we offer a balancing tax deduction on the loss like with other investments? Nah.
-It should be taxed even more! Let’s not forget our state and local governments. Why wait till this investment is sold? Unlike other investments, let’s tax it each and every year. Oh, and let’s raise those taxes anytime it goes up in value. Lower them when it goes down? Don’t be silly.
-It should be something you can never really own. Since we are going to give the government the power to tax this investment every year, “owning” it will be just like sharecropping. We’ll let them work it, maintain it, pay all the cost associated with it and, as long as they pay their annual rent (oops, I mean taxes) we’ll let ‘em stay in it. Unless we decide we want it.
-For that, we’ll make it subject to eminent domain. You know, in case we decide that instead of getting our rent (damn! I mean taxes) we’d rather just take it away from them.

 

[CamiKaze]

I put 300K in AG Balanced in September last year. In July after 10 months i withdrew R60K.

I still have 300K in the account.

Beat that with housing!

Can you get less than what you invested? as in, lose money through this fund?

 

[surface]

Can you get less than what you invested? as in, lose money through this fund?

Please feel to correct me but my interpretation is one can get less money than one invested in most of AG unit trusts (and other companies as well), except bond fund and money market fund as these 2 do not have equity exposure.

http://www.allangray.co.za/IndividualInvestors.aspx?id=34#unittrusts

To add, risk is much less if invested for 2+ years.

 

[TJ99]

Can you get less than what you invested? as in, lose money through this fund?

Of course you can, that's why they're called High-risk.

 

[Jehosefat]

Please feel to correct me but my interpretation is one can get less money than one invested in most of AG unit trusts (and other companies as well), except bond fund and money market fund as these 2 do not have equity exposure.

http://www.allangray.co.za/IndividualInvestors.aspx?id=34#unittrusts

To add, risk is much less if invested for 2+ years.

You can lose in bond funds and money market funds too. Its just much less likely.

 

[Pitbull]

LOL @ 100k

you are mickey mouse dude, even with your 2m house and cars that are nearly paid up

lol?

One day when you have R 100k laying around then you can talk. For now, get back to your 1990 cars ok?

Edit: Btw, thank you all for the informative posts regarding investments. I have been talking to a broker consultant at from Allan Gray. We have an appointment for Thursday. *Was the reason for coming to this thread again to update but saw the CoTY poster and needed to respond first.

 

[Fiza]

@OP, If you buy the right property it can be worth your while. I bought a house for R465k in my area, spending about R10-R15k fixing little things and will get around R4500 rent plus tenant pays the rates and water account. thats about a 11% return. then I can spend another R30k doing the outbuilding up which is about 70sq and I can get another R3k for that. so for an investment of R510k which if i work out correctly is about 18% return p.a. if you go with a company that guarantees payment of rental, rent master charges 5,5 percent so its about R5k a year for that so my return drops to just under 17% which is really not bad. My advice is try and buy a mmuch cheaper property than R1mil as you are probably going to get a higher return on a cheaper house.

 

[Billy]

For Allan Gray, go direct to them. DO NOT go through a consultant or Broker, you will Pay.


All the information is on AG site and you can do everything online.

The only time that I have contact with AG people is at their annual feedback seminars, which coincidently is this evening in Pretoria.

 

[saturnz]

lol?

One day when you have R 100k laying around then you can talk. For now, get back to your 1990 cars ok?

Edit: Btw, thank you all for the informative posts regarding investments. I have been talking to a broker consultant at from Allan Gray. We have an appointment for Thursday. *Was the reason for coming to this thread again to update but saw the CoTY poster and needed to respond first.

You are quite the clever one, spending 150k on a car that goes nowhere and a 100k on a house for investment purposes, makes sense.