Sell or Rent?

[Jean Claude Vaaldamme]

Actually, an executive, high paying job.

Clearly he missed SA with all our crap

Well the biggest issue for most is their lack of people to clean the house and garden for cheap

 

[Grubscrew]

Rent for a year, with a 2 month notice clause in case that you have to return.

 

[airborne]

I would not keep and rent a property out if I'm not close by to have a hand on it and check it out often. Not only do you need to keep an eye on it but you also need to keep an eye on the estate agent renting it out. Big stress and you not near to sort it out.

Also you never going to develop the land, way to much work stress and paperwork, so you not going to see the profits. The guy that buy it from you and develops it will see the profits.

I guess it would ultimately be determined by who is close at hand to manage it on my behalf when I’m not around.

If there isn’t someone like that around and it would purely be a rental agent then I don’t know.

Losing 350k instantly on a sale if you can afford to keep it seems a bit silly to me.

As some would say dont rent a property you cant get to within an hour.

This point is really the nail in the coffin, rentals can go so far south even with decent vetting and if you are half way around the world do you really want that headache and then possibly having to sell the property in poor condition to cut your losses. And this is especially pertinent if you have not rented out property in the past and/or have no long standing relationship with a property manager to look after rental when you have left.

 

[TedLasso]

Thanks Chaps.

Definitely 50/50 just like the conversation in our house Thanks for nothing guys!!

I will be moving to Vietnam for 3 years and then to potentially Spain or France (I think I will have a choice) if the career works out or we may just come back home. We probably will sell nearly everything we have here cos those places don't look very big and probably cheaper to buy everything there again. BTW, we can live right now in UK , but I don't want to go back there again.

So we have a 50% bond on our place. We owe about 600K - which we could pay now if we cash in some investments. In any case, those funds in the S&P gave far better returns then this house

I am veering towards keeping the place for 1 year just in case. Thanks for the tip about 2 month notice period. Definitely will get an agent to look after it - the same person that sold me the house and lives in the area. Happy to pay the fees - thankfully house is in good nick so it should be fine for 1 year. Properties are being rented from R25K - 50K in the area.

However my aim is to get one of my younger extended family members who are looking for a place and working in the area and may be keen. If it is a family member that can move in for a while, then we not looking to make money off them. Just for them to look after the place and for them to cover the muncipal bills and monthly maintance costs and 50% of the bond cost (about 7K). Though It may come with its own problems.

To the point of keeping to redevelop in the future, Yeah I know it's gonna be hard but if we go down this route, it would be outsourced to a proper builder with water tight contracts (excuse the pun - I hope they build water tight houses).

Joburg is truly going down and I hope there will be a change in the future but even if we do come back in 3 - 6 years , I probably won't live here and move to cape or somewhere else.

Tough decisions always!

 

[Tman*]

So a question, been asked to move to another country in Asia for a few years. Next stop after that will be Europe if my career trajectory takes goes as planned.

I live in an area near Sandton. 4 bedroom standalone house, pool ,garden etc

I don't know what to do about my house. Sell it or rent it out for a year or two then sell.

Reasons for sell:-
+Done and dusted. No worries
- will take loss on house (350k) and everything we put in it. Market is still recovering

Reasons for rent
+ if Asia doesn't work out , somewhere to come back to. 6 month lease.
+- area is going thru change. Seeing property being sold, and coverted to duplexes. Each duplex being sold for 2m - which is ridiculous ,so my land is worth more than the house considering if I sell, I could get 3.2m
+Thinking in the future if we don't come back, I would do the same and have a nice retirement nest egg. And also keep one duplex to come back to. Family is still around.
- renter could completely f up the place. Squat etc. Would make life difficult
- forcing me to keep roots in South Africa and not move forward.


My wife says we should just sell and be done. I have never really done well with investments but I know the area we bought into. We have seen the change happening and it was the reason we originally bought 10 years ago knowing this was a possibility that high density housing would be required. In fact , COJ has our area marked for high density housing so changes are easily approved.

Stupid maths but I sell for 3.3m if lucky. Or redevelop (haven't done the costs ) but putting 4 units on land , and each at 2.5, makes a nice return after development costs. Maybe the stress will be the end of me.

How should I be approaching this? Cheers

Having gone through this exercise about 2.5 years ago (Sandton > UK) this is what is comes down too:

1. Do you have someone in JHB that you can trust ( a close friend or family - NOT an estate agent) that can manage your asset in your absence? if not, consider selling. its almost impossible to sit halfway across the world in a different timezone managing a multi million rand asset remotely. Also take into consideration that a relocation is extremely disruptive and you will have your hands full. Your attention and focus will be on your "new" household.

2. If you sell you will have funds availible to invest in better yelding investment vehicles than a ZAR tied property in JHB. I was one of the lucky ones that got my asking price. Look at the trajectory of the JHB property market. Are we on the way up? Consider the current politics, infighting, deterioration of service delivery as a whole to make this decision.

3. For your personally note that if your property is paid off the full rental will be taxable. Im sure you can make some calcs on the net yield after tax when considering to rather investing in a foreign market.

 

[TedLasso]

you say you "could" get 3.2-3.3 for your house.. does this take into consideration the estate agent fees if using them? it can take years to sell your house.

Do you have a definite job lined up overseas? if yes then go

1) sell the house, you've lost money but at least it's done. The loss could be up to R500k depending, let's say worse case.
2) I don't know if your house is paid off and you will see cash, or not paid off and you see nothing.
3) if you see cash, just convert it all to USD, just that alone gets you 6%pa growth in the devaluation of the ZAR
4) renting is a pain unless your property is 100% perfect and your agent managing it is 100% on the ball!
5) you will pay a fortune in monthly agent fees, rates & taxes, maintenance etc etc etc. Your ROI is minimal
6) one doesn't make much money from property in SA unless you're a developer
7) selling your property forces you to work hard overseas and be committed to making it work!

8) oh and then there is SARS... you still need to pay that even though you work overseas, unless you financially emigrate

I thought I would respond to this one

1.
Definitely job lined up overseas. It's a transfer with existing company. All relocation expenses covered including housing and international school education for children.

2.3
Point taken. We never paid this bond off cos we put some of our savings in S&P etc where returns have been great

4.5.
Expect to use letting agent that lives one street up from me and sold the house to us. Yes there will be a cost but only if I can't get a an extended family member who I trust to come in first.

6. Hoping to be the developer (behind the scenes)

7.
Not applicable ... they asking me to go - i work hard already

8.
Those fsckers!!

 

[TedLasso]

Having gone through this exercise about 2.5 years ago (Sandton > UK) this is what is comes down too:

1. Do you have someone in JHB that you can trust ( a close friend or family - NOT an estate agent) that can manage your asset in your absence? if not, consider selling. its almost impossible to sit halfway across the world in a different timezone managing a multi million rand asset remotely. Also take into consideration that a relocation is extremely disruptive and you will have your hands full. Your attention and focus will be on your "new" household.

2. If you sell you will have funds availible to invest in better yelding investment vehicles than a ZAR tied property in JHB. I was one of the lucky ones that got my asking price. Look at the trajectory of the JHB property market. Are we on the way up? Consider the current politics, infighting, deterioration of service delivery as a whole to make this decision.

3. For your personally note that if your property is paid off the full rental will be taxable. Im sure you can make some calcs on the net yield after tax when considering to rather investing in a foreign market.

Thanks. forgot that we would need a bond to 'write off' some costs - so definitely not to pay it off if we keeping it for a while. In fact, I will take out some money if I need too.

Have family members with their own places nearby so can ask them to check in. Also built some good relationships with builders, etc in the past years when we needed to fix stuff etc. So I know who I can call and trust if things break.

The point of just taking the loss about R300-500K by you and others and then moving all the money into better yielding investments is taken aboard. I should then also include the cost of 'worry/stress/hassle' ...

ok, time to stew on this further.

 

[Snotface]

How should I be approaching this? Cheers

Never rent out. I had a house in Sandton. Went through a bad spell in 2010. Rented it out for R20,000.00 a month to a couple who both ran their own businesses, so you would think they were decent people.
Utter scumbags. They trashed my house. Their dogs dug up my irrigation system etc. They started pleading poverty and paying partial rent etc. Unfortunately i was stuck between a rock and a hard place.
After two years they moved out and my next rentees were fantastic, but it really wasn't worth it. If i was in that situation now, i'd sell and put the money into crypto for a couple of years (not financial advice).

 

[Tman*]

Thanks. forgot that we would need a bond to 'write off' some costs - so definitely not to pay it off if we keeping it for a while. In fact, I will take out some money if I need too.

Have family members with their own places nearby so can ask them to check in. Also built some good relationships with builders, etc in the past years when we needed to fix stuff etc. So I know who I can call and trust if things break.

The point of just taking the loss about R300-500K by you and others and then moving all the money into better yielding investments is taken aboard. I should then also include the cost of 'worry/stress/hassle' ...

ok, time to stew on this further.

When I sold my property it was a MISSION simply finalising the sale remotely and keeping up with "SA matters" while trying to get my new household in order. Im still dealing with some SA related matters in regard to moving Provident funds abroad and its a pain the in bum.

Simple tasks such as phoning someone in SA and dealing with the right people become a headache. Now imagine multiplying that by x10 if you have a 6 hour time difference and you have to phone COJ to sort out a billing issue lol

 

[deweyzeph]

How the hell can you only get R3.2 million for a 4 bedroom house near Sandton with a pool, etc?

 

[The Darkness]

Guys in my street immigrated to NZ! They were back in 2 months lol!

What a pointless comment. I mean really! What does this even mean? So some guys in your street left and came back - must be the same for everyone leaving? To counter this statement; I have friends all over the world (including NZ) who are thriving and loving it.

 

[L-Dog]

I know numerous people who have immigrated back after a few years/months. I would definately rent as it is more flexible, you can always sell in 6-12 months after weighing up the options.

You should also considering applying for rezoning. Cost is relatively cheap and if/when zoning is approved you can sell to a developer without taking any construction risk and locking in a nice profit.

 

[TiredPlatypus]

- will take loss on house (350k) and everything we put in it.

This is more emotional then relevant.

What you paid for the house does not change the decision (other then tax calculations but a loss is good for that) as it is a past event that cannot be changed. Only important factors are what it is worth today and predicted growth in the future.

 

[maumau]

Actually, an executive, high paying job.

Clearly he missed SA with all our crap

They'd have to be really, really stupid to leave without a job lined up.

 

[maumau]

Do not count on developers will do right by you. Once the high density building begins they might low ball you.

Several apartment buildings close to the area I used to live were "upgraded" and some 92m sq, 3 bedroom, 2 bathroom units were marketed as family homes! When developers wanted to expand into one of the side roads they offered R1M to a young couple who'd bought their property for R2.5M a few year previously.

It was a take it or leave it deal and the couple's property was already surrounded by apartment buildings overlooking their home, garden and pool.

 

[Polymathic]

Sell, even if you're going to come back to SA you're not going to live in Gauteng

 

[prod]

We decided to rent out for ±2 years. We have a good agent though who also owns properties in our estate, it was a big factor when we were deciding.

 

[Tman*]

Sell, even if you're going to come back to SA you're not going to live in Gauteng

This is also something to factor in which I totally forgot.

My 1st trip back to SA I made the mistake of "couch surfing" (albeit in guest rooms) from friend to friend and it was a very uncomfortable experience having to pack up every few days.

Now, I book accommodation & tell those fam & friends that I want to see to join me. Im heading to SA in a few weeks, flying straight to CT.

If I ever have to return to SA, there is not a way in hell I am going back to JHB

 

[3WA]

If any of you guys who are emigrating need a solid man of the people to look after your property, I will stay there. And you don’t even have to pay me. I’ll happily do it for free.

 

[TedLasso]

If any of you guys who are emigrating need a solid man of the people to look after your property, I will stay there. And you don’t even have to pay me. I’ll happily do it for free.

Now need to read all of @3WA posts to see what type of character they are