Purchasing property

It is along the new N7 road that the flats have been built looking like the cape flats - that's why we were gobsmacked. It's a risk you take buying a flat anywhere in parklands and renting through an estate agent because, even for a fee, it does not guarantee that the tenants will pay - just saying - the agent is not paying the rent, the tenant is.
 
Give it time, yes there is an increase in the property market and many agents say this is the year, buy now or regret it later, prices from here on in only has one way to go etc....

I however do not believe this as we are bound to see one or two interest rate hikes this year and these hikes will have a far larger impact than those in previous years as consumers are far more 'stretched' to the limits this time round and any hike in interest rates will put a big damper on any larger debt purchases.

I do not say that prices will go back into a slump, just that there is not going to be any spectacular property run like back in 2005-2008.
 
Buyers market is over im afraid, I picked up my house for a damn steal last year April.
 
Batista said:
Buyers market is over im afraid, I picked up my house for a damn steal last year April.
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Agreed, my neighbour sold his small 2 bed, one bath, one garage in less than a week (Protea Heights), was very surprised it went that quick. I bought 2 years ago and got my place, that's quite a bit larger for a lot less than he was advertising.
 
CamiKaze said:
I have been looking in areas like Paarl and Brackenfell and these houses are ridiculously overpriced. It doesn't even look like much. There is a house in Northern Paarl that looks very normal to me...very. It costs 1.8 mill. So yeah...I guess I'll have to continue paying off someone elses bond.

BTW, houses in Kuilsrivier seem to be cheaper.
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Paarl is going through a boom. A lot of people from the Northern Suburbs want to relocate to Paarl, so the prices have sky rocketed with the increased demand.

Something similar happened with Brackenfell a few years ago and with the new developments around Sonkring and Protea Heights, I wouldn't expect those prices to drop soon.
 
Stefanmuller said:
Basically, if you own 5 residential units that are new (bought new as first owner or from developer or erected)

....
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This is quite a interesting read, would you need to be the sole owner of those properties or could you and someone else buy together and still have the tax benefits?
 
For the past five years there has been a vast reduction in new property builds. As a result there is a shortage of stock in the lower end of the market (below R1.5M). This is happening in Cape Town and in Centurion, two areas that I have had personal contact with agents.

If you want to get on the property ladder now is the time. Prices and rents will rise due to the shortage, and it will take time for new stock to filter in.
 
Have you checked out Bothasig? You can still grab a 3 bed house there for under a R1mil.
 
Beachless said:
This is quite a interesting read, would you need to be the sole owner of those properties or could you and someone else buy together and still have the tax benefits?
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No, you have to be the sole owner. You can buy the five properties in a trust with other people being the beneficiaries. But then you need other income in the trust to get the full benefit in the first few years. You want to avoid tax you would have paid on existing income (such as your salary or other investment income). Salary is best because of the monthly cash flow on PAYE saved.
 
Stefanmuller said:
No, you have to be the sole owner. You can buy the five properties in a trust with other people being the beneficiaries. But then you need other income in the trust to get the full benefit in the first few years. You want to avoid tax you would have paid on existing income (such as your salary or other investment income). Salary is best because of the monthly cash flow on PAYE saved.
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Thanks I though it was a long shot, I already have property with a family member hence the question.

I notice you said you can buy over a period of time, what is a sensible period ?
My plan was to buy some additional property this year but I was planning on a larger unit. If I can manage to get 5 smaller units over the next 5 years or so I guess that would make more sense than the 2 larger ones I was aiming to do?
 
Beachless said:
Thanks I though it was a long shot, I already have property with a family member hence the question.

I notice you said you can buy over a period of time, what is a sensible period ?
My plan was to buy some additional property this year but I was planning on a larger unit. If I can manage to get 5 smaller units over the next 5 years or so I guess that would make more sense than the 2 larger ones I was aiming to do?
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I am planning to do the same as I am not in the position to buy more than one but I want to start so long. You will always get the s13sex deduction but the combined tax saving will be less as time passes. This is due to the fact that properties like these (entry level) starts making profit after a few years because rent goes up and interest on the bond goes down in time.

I will check it out...will also consult my boss on piecemeal buying. The model I have with clients are purely for high earners who want the tax break. In the beginning you make a tax loss but the cash flow is almost breakeven from the start because of the tax saving on existing income. Basically you get to own 5 properties without paying a cent and making positive cash flow after tax within 4 years.
 
When reading articles like this I am sooooooo glad I purchased my property in 2001, just before house prices REALLY went insane!

Erf size 1700 sq/m and the main house is about 250 sq/m, 4 bedrooms, 3 bathrooms, double garage, dining room, tv room, large lounge and a study. I purchased this for R185000.
 
geezer said:
When reading articles like this I am sooooooo glad I purchased my property in 2001, just before house prices REALLY went insane!

Erf size 1700 sq/m and the main house is about 250 sq/m, 4 bedrooms, 3 bathrooms, double garage, dining room, tv room, large lounge and a study. I purchased this for R185000.
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:cry:
 
Stefanmuller said:
I am planning to do the same as I am not in the position to buy more than one but I want to start so long. You will always get the s13sex deduction but the combined tax saving will be less as time passes. This is due to the fact that properties like these (entry level) starts making profit after a few years because rent goes up and interest on the bond goes down in time.

I will check it out...will also consult my boss on piecemeal buying. The model I have with clients are purely for high earners who want the tax break. In the beginning you make a tax loss but the cash flow is almost breakeven from the start because of the tax saving on existing income. Basically you get to own 5 properties without paying a cent and making positive cash flow after tax within 4 years.
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Thanks again, if piecemeal is included that would make life much easier.
 
geezer said:
When reading articles like this I am sooooooo glad I purchased my property in 2001, just before house prices REALLY went insane!

Erf size 1700 sq/m and the main house is about 250 sq/m, 4 bedrooms, 3 bathrooms, double garage, dining room, tv room, large lounge and a study. I purchased this for R185000.
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yeah back in those days ....so so lucky
 
Stefanmuller said:
I am planning to do the same as I am not in the position to buy more than one but I want to start so long. You will always get the s13sex deduction but the combined tax saving will be less as time passes. This is due to the fact that properties like these (entry level) starts making profit after a few years because rent goes up and interest on the bond goes down in time.

I will check it out...will also consult my boss on piecemeal buying. The model I have with clients are purely for high earners who want the tax break. In the beginning you make a tax loss but the cash flow is almost breakeven from the start because of the tax saving on existing income. Basically you get to own 5 properties without paying a cent and making positive cash flow after tax within 4 years.
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Not sure if want or not.
 
Batista said:
Not sure if want or not.
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It doesn't have to be low cost entry level houses. It can be R2 million each or two expensive ones and three cheapies in different areas. The only requirement is that it must be new, you must have at least 5 and all must be rented out.
 
*Medusa* said:
Have you checked out Bothasig? You can still grab a 3 bed house there for under a R1mil.
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only if it's prefab.. they're now agressively marketing that area as well.. 2 places slipped through my hands :(

Richwood is dirt cheap, but you're taking your life into your hands!
 
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