Property Development - Making money with property

I was just chatting to my friend about this.

If one only deals in property until one has enough money to purchase a property outright - what an amazing accomplishment. Not having to fork off a large portion of your salary each month!!! One could still work and enjoy 100% of your salary - awesome position to be in.
 
Enough with the derails already.

Velenoso: How do you cope with a falling property market.

Last 5 years in SA have been one huge bull run....but will this scheme work when the property market is falling? e.g. When all the Aussie Visas that people are applying for are finally approved.

Also, I assume you pay CGT on each sale?
 
Then you would pay CGT as you are selling a capital asset.

If you do it consistently/frequently then it is not a capital asset, but a business/trade, liable to income tax.
 
It was 1,5 mil in 2007. I think its 2mil this tax year. Property > 2 hectares is apportioned.
 
Velenoso said:
How much I've made or haven't made is not your business, but obviously you are bitter about those of us who have actually made money out of property and not just lived in them to save them for "little Johnny". Grow some balls.
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Um, sorry to butt in, well actually not too sorry, but I'm afraid you made it all of our business when you happily provided us with you entire income statement and balance sheet in the "how much do you earn thread"!

I also feel your advice is ill advised for a lot of the guys you are preaching too. There is no easy money to be made and unfortunately, whether deliberately or not, this is the message you are sending out. Even Donald Trump often loses millions some of the new developments he enters into. He can afford to in most cases but for a lot of the guys you are chatting to, one bad deal could lead to them having credit problems for the rest of their lives.

Yes, getting rich quick sounds wonderful but I really think you need to balance the success stories out with the failures and caution the uninformed of the risks. You did not do this and even went so far as to say it is highly unlikely that you will ever lose money in property. Tell that to the people who own worthless beach front properties in Ballito after the high seas recently. tell that to the guys with the prime properties up the North Coast of Natal that are due to devalue due to the building of an airport which will result in them being in the flight path of boeing, and add the double whammy of the proposed low cost housing proposed for the area.....

If your cash flow is not healthy you could also be suffering in the environment we recently experienced with a number of interest rate hikes.
Share you advice but do not preach it as a get rich quick fairy tale like you are...
 
HavocXphere said:
Velenoso: How do you cope with a falling property market.

Last 5 years in SA have been one huge bull run....but will this scheme work when the property market is falling? e.g. When all the Aussie Visas that people are applying for are finally approved.

Also, I assume you pay CGT on each sale?
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There is a lot that has not been stated... CGT, initial costs like bond registration, transfer duties etc. It has all been sugar coated and yes, in the last few years it was not difficult to make money out of property, but things have changed....

Guys listen to these wonderful stories but be careful!!
 
How does listing your expenses/income each month automatically entitle someone to know how much money they have accumulated? Two different things.

Regardless, this is a passionate plea to please keep the thread on topic. I have noted the substance of your warning. It is valid and must be considered. However the fact that there are all these fee's does not detract from the validity of the business.

Everything in life has ups and downs. I am prepared to accept the ramifications of my actions.
 
LancelotSA said:
Um, sorry to butt in, well actually not too sorry, but I'm afraid you made it all of our business when you happily provided us with you entire income statement and balance sheet in the "how much do you earn thread"!

I also feel your advice is ill advised for a lot of the guys you are preaching too. There is no easy money to be made and unfortunately, whether deliberately or not, this is the message you are sending out. Even Donald Trump often loses millions some of the new developments he enters into. He can afford to in most cases but for a lot of the guys you are chatting to, one bad deal could lead to them having credit problems for the rest of their lives.

Yes, getting rich quick sounds wonderful but I really think you need to balance the success stories out with the failures and caution the uninformed of the risks. You did not do this and even went so far as to say it is highly unlikely that you will ever lose money in property. Tell that to the people who own worthless beach front properties in Ballito after the high seas recently. tell that to the guys with the prime properties up the North Coast of Natal that are due to devalue due to the building of an airport which will result in them being in the flight path of boeing, and add the double whammy of the proposed low cost housing proposed for the area.....

If your cash flow is not healthy you could also be suffering in the environment we recently experienced with a number of interest rate hikes.
Share you advice but do not preach it as a get rich quick fairy tale like you are...
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Alright look, I'm assuming that everyone on the forum, specifically those who can afford to buy property in any event, are intelligent enough to assume that there is obviously a risk in any business venture.

I don't in any way intend for my posts to imply that this is an easy or risk free business. There was a hell of a lot of money to be made with property in years past, and there still is a lot of money to be made. Look, as you point out, there is a chance of you losing money, whether by an act of god, government or falling property market, but it is unlikely, it's a fairly safe bet if you do your homework and choose wisely.

With regard to my posting my balance sheet in another thread, so what? Everyone else did so? BiteMe just chooses to attempt to discredit me. I don't have a hidden agenda, that thread was basically a poll of people salaries and expenses. This is specifically why I decided to create a new thread so that we can discuss property.

Anyway, I hope that is the end of that. Let's discuss the topic at hand, shall we?
 
Velenoso said:
I detest a man who tries to tell another man how to make a living. It's close minded people such as yourself who will never gain financial independence and will forever rely on their paycheck to survive.

If you don't have something useful to contribute or a question that you need answered then don't day anything at all. ;)
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Well said Velenoso:cool::cool::cool:
 
My family is in the Property Development business, It has been very good to us.

I did do my estate agents CEA course. Helps with the understanding.

Velenoso is talking the truth there is lots of money to be made. Another good way to make money is to buy a piece of land, and get is subdivided, EIA done ect, just before it it time to build you sell it to a developer. :) granted you dont make as much as building. but you can turn a property over much quicker.

It works out benifical to both sides, as the builder does not have to tie his money up during rezoning,
 
hyperian said:
Its a great idea if you can make it work. Otherwise, just watch those poor buggers on sky news that have lost millions of pounds because the value of the propoerties that they bought have fallen below their purchase value.
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I know very little about property investment, but what I've noticed is you only really lose money if you sell. Even if the property becomes worthless ... you still have the walls and roof. A proper place to live in that you can use every day. It's not like buying shares where you own a bunch of worthless numbers on a bank statement when the stocks plummet.

Anyway, just my 5c worth.
 
Sly21C said:
I earn peanuts, I earn R8 K a month and I am seriously thinking of getting into the property market, but I think the only way for me to do that is to go into it with a friend, put our money together and split the profits after selling a property. I really wonder if it is possible for me to start with maybe a low cost house, you know start small, then I'll work myself up and maybe after 5 years or so I'l have enough cash saved to buy properties that run into the millions. Do you think it's possible for a guy like me earning R8 K can get into the property market? Have you seen someone or some people do it before?

P.S. In 2 or 3 years time, my salary will be double than what I am getting now.
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I'm sitting with the same problem where I don't earn enough to get a bond on anything that isnt on the wrong side of the train tracks ... and full of nigerians.

I know that the key to saving money isnt how much you earn, but what you decide to do with that savings. After my insurance/med aid/installments/etc. I bank about R5-6k a month, of which half gets thrown into a savings account that I never touch. It's slowly filling - but too slow for me to put down a lump sum on a property.

how do you chaps go about buying your first property and thereby getting into the game ?
 
how do you chaps go about buying your first property and thereby getting into the game ?[/QUOTE]

I bought my first property when I turned 21. Was a great investment. a few years ago prices were better, I got the flat for R120k, fixed it up a bit and sold it last year for R490k.

The best (and very often only) way to get into property if you don't have a wealthy family behind you is to partner up with a friend and buy your first property... You can have parents/friends buy in with you and your friend if you still don't qualify for a large enough bond. The right time to buy a property can't really be planned. Just do it!
 
I bought a 3 bedroom, 2 bathroom apartment in Dec 2014 which cost R630000. It was a new development which i was planning to move into but I got a job offer in Dubai. I put down a deposit of R60000. My installments work out to about R5600 per month. I have a tenant who covers most of my installment and I contribute less than R1000 to cover my monthly debit orders. Could anyone nudge me in the right direction turning this into something profitable? I'm planning on returning to SA after my 3 year work contract expires and would like to start acquiring more properties to invest in.
 
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