Velenoso
Expert Member
Ok, so here we go. This is a thread for anyone who is interested in making money with property.
Edit: IzZzy's PM has had to be removed
Hope you guys don't mind, in the interest of time, I'm going to steal from some of my older posts on the forum.
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This should be enough to get the conversation started. I recommend reading this thread http://mybroadband.co.za/vb/showthread.php?t=81357 . In addition to mine, there is some good info there.
Picard, to answer your question:
How does your support structure look. Legal staff, secretarial, partners ... in a venture such as land developement?
What does one need to engage in something like property developement. Becuase property developement in SA is only just someway along its route. It still has a long way to go and has many more oppertunities waiting.
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I'm a very hands on sort of guy. I like dealing with people myself. I deal with several very competent companies for the various things you describe. I have an excellent property attorney, land surveyor, etc who handle a lot of the legal aspects of my business. I have a good contact at the council. I don't particularly like dealing with estate agents, but I quite often do. I work with a number of agencies, depending on which area I'm building/working in.
Ok, so I think that is a good start.
Edit: IzZzy's PM has had to be removed
Hope you guys don't mind, in the interest of time, I'm going to steal from some of my older posts on the forum.
My advice to someone starting out would be the following:
1. By any means possible, buy your first property as soon as possible.
2. If at all possible, do not move into your first property. (someone gave advice about buying with some friends - good advice)
3. Buy the most run down property in the best area that you can afford.
4. Invest a little money to renovate the house and sell it for a profit.
This way, with a little luck, you can kill half your bond for your next house with the profit from the first. Granted, not everybody wants to do this as a business, but it's a great way to cut your bond for your second property (the one you move into) in half.
Let me give you an example of one I did last year.
Bought a property in a newly built golf estate for R 1,400,000 at roughly R 15,000 a month. I invested R 200,000 to add two more bedrooms and a few other things. I sold the property for R 2,100,000 two months ago. About six months after I bought it.
Result: R 500,000 - R 90,000 paid for bond for six months. I made a profit of about R 400,000
So, if you're looking to buy a house for R 800,000 to a million, you can pay half in cash and take out a much smaller bond...
1. By any means possible, buy your first property as soon as possible.
2. If at all possible, do not move into your first property. (someone gave advice about buying with some friends - good advice)
3. Buy the most run down property in the best area that you can afford.
4. Invest a little money to renovate the house and sell it for a profit.
This way, with a little luck, you can kill half your bond for your next house with the profit from the first. Granted, not everybody wants to do this as a business, but it's a great way to cut your bond for your second property (the one you move into) in half.
Let me give you an example of one I did last year.
Bought a property in a newly built golf estate for R 1,400,000 at roughly R 15,000 a month. I invested R 200,000 to add two more bedrooms and a few other things. I sold the property for R 2,100,000 two months ago. About six months after I bought it.
Result: R 500,000 - R 90,000 paid for bond for six months. I made a profit of about R 400,000
So, if you're looking to buy a house for R 800,000 to a million, you can pay half in cash and take out a much smaller bond...
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That's right. Bought my first property in March 1999. I first came here in 1998 on holiday (was doing some work in Kinshasa). I loved it here and decided to come back. A good friend of mine also came over (he's from Australia) and we bought a property. (And started a few other businesses). We both still live and work here.
(Bear in mind though, I was earning US$ at the time which made it a lot easier to afford a property at the age of 18, but it's not impossible. It's actually quite feasible for a single guy earning over R 20,000 a month)
South African people seem to be afraid to buy property at a young age. This is understandable because they don't want debt but if you approach property as a business, it can be the most profitable thing you ever do.
Don't get me wrong, there are some risks with property, but it is VERY unlikely that you will lose money. The worst that can happen is that you wont make any.
(Bear in mind though, I was earning US$ at the time which made it a lot easier to afford a property at the age of 18, but it's not impossible. It's actually quite feasible for a single guy earning over R 20,000 a month)
South African people seem to be afraid to buy property at a young age. This is understandable because they don't want debt but if you approach property as a business, it can be the most profitable thing you ever do.
Don't get me wrong, there are some risks with property, but it is VERY unlikely that you will lose money. The worst that can happen is that you wont make any.
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for renovation / building purposes I would definitely suggest a house / cluster. Also there are huge profits in building from scratch. (probably not the best idea for first time buyers though)
It's difficult to rent out a place for the price of your monthly loan repayment, never mind for a profit. The only way that making an income from rent is feasible is if you own the property.
It may be a good idea to get a tenant in who would be willing to cut a deal with you. (i.e. pay half the bond on the condition that he doesn't mind staying in one half of the house while the other is under construction, etc.) This would save you quite a bit of money while you renovate the property.
It's difficult to rent out a place for the price of your monthly loan repayment, never mind for a profit. The only way that making an income from rent is feasible is if you own the property.
It may be a good idea to get a tenant in who would be willing to cut a deal with you. (i.e. pay half the bond on the condition that he doesn't mind staying in one half of the house while the other is under construction, etc.) This would save you quite a bit of money while you renovate the property.
This should be enough to get the conversation started. I recommend reading this thread http://mybroadband.co.za/vb/showthread.php?t=81357 . In addition to mine, there is some good info there.
Picard, to answer your question:
How does your support structure look. Legal staff, secretarial, partners ... in a venture such as land developement?
What does one need to engage in something like property developement. Becuase property developement in SA is only just someway along its route. It still has a long way to go and has many more oppertunities waiting.
_______________________________________________________________________________________________________________
I'm a very hands on sort of guy. I like dealing with people myself. I deal with several very competent companies for the various things you describe. I have an excellent property attorney, land surveyor, etc who handle a lot of the legal aspects of my business. I have a good contact at the council. I don't particularly like dealing with estate agents, but I quite often do. I work with a number of agencies, depending on which area I'm building/working in.
Ok, so I think that is a good start.
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, was not how does one afford to -buy- a property, but how does one buy a property and renovate it, whilst still living somewhere.
