My first property - help needed.

[chris@notebook.co.za]

I would be interested in doing a JV with you on such properties, reduce the risk - but also reduce the return.
But if you do not move on it you make 0 return.


Christopher Riley
chris@notebook.co.za

 

[saturnz]

The current tenant is a student, So he cant buy the property. The owner is in a bit of a financial mess, so he wants to get rid of the property. As far as i know, its a case of sell before the bank repossess it.

this is suspicious because the rental should cover the bonded property unless ofcourse his other activities have exposed this property as well

by the way that levy is quite high, any reason for this? I know of people living in estates in the Strand and pay levies of under R500 on properties of R3m.

 

[Ancalagon]

this is suspicious because the rental should cover the bonded property unless ofcourse his other activities have exposed this property as well

by the way that levy is quite high, any reason for this? I know of people living in estates in the Strand and pay levies of under R500 on properties of R3m.

Its not normally the case that the rent covers the bond these days - R5500 per month rent is very high considering the value of the property. In Johannesburg, a place that you could rent for R5500 would probably cost about R600 000 to buy.

 

[Velenoso]

It's not always easy to cover the bond with the rental from day 1. Jump on that investment property right away.

Yes electricity is not included but you pass that cost onto the tenant. I'll buy that tomorrow if you don't want it.

 

[ToxicBunny]

this is suspicious because the rental should cover the bonded property unless ofcourse his other activities have exposed this property as well

by the way that levy is quite high, any reason for this? I know of people living in estates in the Strand and pay levies of under R500 on properties of R3m.

Say what?

Very few, if any properties have the bond covered from day 1 by the rent...

Break even on most places is in the 3 to 4 year range.

 

[Fiza]

that insurance premium of a R1000 is ridiculous. I just purchased a property, building insurance which covers damage to property due to fire, theft to external fixtures, riots, natural disasters etc, covered for 1,4mil is costing me R187 a month from auto and general. If poster is in eatern cape and want to purchase a property elsewhere, apply for bond through betterbond, i'm sure you can sign papers and do everything at their branch here. I applied through them and must say I received excellent service, from date of application, they had the deal approved in a week

 

[saturnz]

Say what?

Very few, if any properties have the bond covered from day 1 by the rent...

Break even on most places is in the 3 to 4 year range.

as in the person who currently owns the property. I'm guessing the seller has owned the property for a while already and shouldn't have financial problems as a result of this property, especially given the low value and high rental earned on such a low value property.

 

[chris@notebook.co.za]

have you acted on this opportunity?

Christopher Riley

Hi there Guys.

An oppertunity presented itself for me to buy my first property located in the east of Pretoria. Here are some details:

Price: R430 000
Revies applicable to the complex: R800 p/m.
Tenant currently pays R5500 p/m (Tenant will rent from me if i continue with the purchase)
Approx installemt : R3636 pm (9%, R20k dep, 20 years)
Approx insurance costs: R1000 p/m

With all the above, the rent income will cover the levies, insurance and installments.

I want to buy the property as an investement and to have a house to live in when i move back to Pretoria in about 12 months.

Now, i have a few questions if you dont mind.

1) during the process, how much time do i need to spend in Pretoria? Im currently living in the Easten Cape, so i cant just fly up there indefinitely. How much of this process can be done via email, fax or telephone?

2) the logical order of this process is: offer to purchase, loan, complete the deal. Right?

3) anything else i need to consider?

thanks you

 

[ToxicBunny]

as in the person who currently owns the property. I'm guessing the seller has owned the property for a while already and shouldn't have financial problems as a result of this property, especially given the low value and high rental earned on such a low value property.

Normally I'd agree with you... but you will find that having an existing bond could be hurting his credit score, and making affordability on other items a problem.

Also the rental will probably cover the bond and rates, maybe some of the levies, but none of the maintenance and that maintenance cost could be quite high.