Real Estate Investor Magazine

September 2023 edition: full text

Every page of the September 2023 issue as text. To see a page as it was designed, open it in the magazine.

Read it as a magazine

Page 1

Open page 1 in the magazine →

rei.co.za

SEPTEMBER/OCTOBER 2023

TENANTS, LANDLORDS & PROPERTY MANAGERS

Who is responsible for what in a rental relationship?

SENIOR LIVING INVESTMENT GUIDE

9 Essential Considerations for Retirement Home Investment

UNLOCKING UK PROPERTY INVESTMENT

A novice guide for South African investors Renovation Project

INVESTMENT CASE STUDY

Profitable Guesthouse Renovation Project

REDWOOD ESTATE

The visionaries behind the new boutique connected living estate.

Page 2

Open page 2 in the magazine →

Elevated expertise. Elevated results.

With innovative, sustainable Commercial Property Finance solutions, we are future-proofing the African continent by empowering our clients to expand their businesses.

cib.absa.africa

Authorised Financial Services Provider Registered Credit Provider (NCRCP7)

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 3

Open page 3 in the magazine →

Corporate and Investment Banking

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 4

Open page 4 in the magazine →

16 Years of Real Estate Media Excellence: A bright future awaits

ear Investors and Property Partners

Welcome to our latest edition of Real Estate Investor Magazine (REIM), a momentous occasion as we celebrate our 16th anniversary, marked by the release of our #161st issue. It's hard to believe that it was back in September 2007 when Real Estate Investor Magazine

made its debut in South Africa. As we reflect on this incredible journey, we are profoundly grateful for your unwavering support and loyalty, which have been the cornerstone of our success.

In this special celebratory issue, you, our cherished readers, take centre stage as our honoured guests. After all, it is your enthusiasm, feedback, and continued readership that have propelled us forward. We couldn't possibly celebrate our 16th birthday without each one of you!

From the very beginning, our mission was clear: to serve a specific niche within the South African investor and property industry. Over the years, we've weathered numerous property cycles, witnessing both triumphs and challenges. Through it all, we've strived to provide valuable insights and guidance to property owners, emphasizing the importance of responsible investment.

Today, we find ourselves in a unique market dynamic, with an unprecedented housing shortage and supply constraints. This presents a golden opportunity for the private sector to play a pivotal role in addressing this issue,

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 5

Open page 5 in the magazine →

as government efforts alone may fall short of ambitious targets.

As we take you behind the scenes, we invite you to meet the dedicated individuals who work tirelessly to make Real Estate Investor Magazine a source of newsworthy, informative, educational, and inspirational content. Over the past 16 years, we've adapted to the evolving real estate media landscape, transitioning from a print magazine and events company to a digital and eventsfocused organization, further enhancing our reach and impact.

Our commitment to upholding a sacred set of editorial principles remains steadfast. These principles ensure that every article published in Real Estate Investor Magazine maintains the highest quality and relevance. Our authors can attest to the meticulous care and attention each draft receives before it reaches your hands.

podcasts. Your engagement enriches the real estate community and helps shape the discourse within the industry.

We may not be perfectionists, but we certainly strive for excellence in all we do. We owe a heartfelt thank you to you, our readers, for your invaluable contributions, engagement, and unwavering support throughout these 16 remarkable years. Your loyalty means the world to us, and we are excited to embark on the journey ahead with you.

Cheers, everyone! Here's to the next sixteen years of growth, learning, and success!

Warm regards

NEALE PETERSEN FOUNDER & EDITOR-IN-CHIEF

The journey doesn't end with publication. It continues with you, dear reader, as you consume, analyze, and often engage in discussions across various platforms, from newsletters to live events, webinars, videos, and

SAPOA Journalism Awards for Excellence 2023 - Real Estate Investor Magazine were awarded the runners-up Award for Property Publication of 2023 held at Sun City on 21 September 2023. Pictured are all the winners and runners-up in the Property Publication and Feature Journalists category. (Image by Mark Pettipher)

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 6

Open page 6 in the magazine →

REI TEAM

EDITORIAL

Founder & Editor-at-Large

Neale Petersen neale@rei.co.za

Website Specialist

Graham Miller graham@rei.co.za

Digital Strategist

Asheeq Cader asheeq@rei.co.za

Digital Strategist

Kay-leigh Bier kay-leigh@rei.co.za

Digital Designer

Heather Spangenberg design@rei.co.za

Accounts Manager

Marisa George marisa@rei.co.za

CIRCULATION

Audited

*18053 (April - June 2023)

*891,893 Total Page Reads (12 months)

SEPT/OCT 2023 SA Real Estate Investor Magazine

FRONT COVER IMAGE: Schalk van Wyk alongside the Redwood Estate team

CONTRIBUTORS

Jaco Grobbelaar Rael Levitt Guy Gillespie Sonja Clarke Manuel Ortiz Carlo Mariani Richard Frank Dean Parata Sophie Gamborg Danie van der Merwe Gugu Mjadu Peral Scheltema Jacqui Savage

ADVERTISING

info@rei.co.za

+27 21 761 3848

PUBLISHERS

All rights reserved. No portion of this publication may be reproduced or used in any form without prior written consent and permission from Reale Media. The publisher gives no written guarantees or assurances and makes no representation regarding any goods or services written or advertised within this edition. Prospective investors should always consult their attorneys, advisors or accountants before investing. Copyright © Reale Activation. Pty (Ltd)

Page 7

Open page 7 in the magazine →

Events & Webinars

Would you like to host your own webinar or event with us? Send us an email on info@rei.co.za

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 8

Open page 8 in the magazine →

CONTENTS

TRENDING

SEPTEMBER/OCTOBER 2023 #161

03 EDITORIAL VIEW - Neale Petersen 05 REI TEAM & CONTRIBUTORS 07 CONTENTS PAGE 09 ASK THE EXPERT 13 REIMAG ANNIVERSARY - Real Estate Investor Magazine's 16 year journey 21 SAPOA AWARDS - Accolades for REIs 27 MASTER INVESTOR - Schalk van Wyk of Redwood Estate 43 COMPANY PROFILE - Redwood Estate

INVESTING

NAVIGATING SA'S DISTRESSED PROPERTY MARKET - Best solutions for Homeowners and Buyers 57 TENANTS, LANDLORDS & PROPERTY MANAGERS - Who is responsible for what in a rental relationship? 63 SECTIONAL TITLE SCHEMES - Developing an effective record keeping system

FINANCE

PROFITABLE GUEST HOUSE RENOVATION PROJECT - Transforming Brownfields into Goldfields in Nelson Mandela Bay

WEALTH

TRUSTS IN PROPERTY - Unlocking the myriad of benefits for investors

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 9

Open page 9 in the magazine →

ARTIFICIAL INTELLIGENCE - If AI has a dark side, it's us NAVIGATING THE KNOWLEDGE ECONOMY - Why its vital for South African small businesses

COMMERCIAL

111 FLEXIBLE WORK SPACES - Challenging the Hustle Culture paradigm! 119 INDUSTRIAL & LOGISTICS - Introducing Inospace fulfilment, a revolutionary logistics solution for your e-commerce business

TECHNOLOGY

OFFSHORE

127 UNLOCKING UK PROPERTY INVESTMENT - A novice guide for South African investors

RETIREMENT

139 RETIREMENT INVESTMENT GUIDE - 9 Essential considerations for Retirement Home Investors

111

139

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 10

Open page 10 in the magazine →

ASK THE EXPERTS

Send your questions to info@rei.co.za or post on our FaceBook or LinkedIn pages and we will direct them to the necessary expert

Unlocking the benefits and investments of the EB-5 Visa Programme

Sonja Clarke Regional Director South Africa FIRST PATHWAY PARTNERS

hat is the EB-5 program. What are some of the most common reasons that people are interested in EB-5. What are some additional benefits associated with EB-5 and does the money get invested into real estate if so where?

t was created by the U.S. Congress in 1990. The EB-5 Immigrant Investor Programme allows foreign nationals to obtain U.S. permanent residency (a "green card") for the investor, their spouse, and any unmarried children under 21.

The programme requires a USD $800,000 investment in a qualifying "at risk" project, creating at least 10 American jobs per investor. In return, they become eligible to receive permanent U.S. green cards, allowing them to live and work anywhere in the U.S.

SEPT/OCT 2023 SA Real Estate Investor Magazine

Manuel Ortiz Vice-President Global Business Development FIRST PATHWAY PARTNERS

Reasons why people invest in EB-5? EB-5 has typically generated interest from families who want to migrate to the United States to achieve the American Dream. Other times, parents look at the EB-5 programme as a superior alternative to the F1 student visa. Students who obtain U.S. residency through the EB-5 programme can save up to 3 times the cost of tuition that international students would have to pay. More importantly, once they graduate, they can apply and work anywhere they want without depending on corporate sponsorship (H1-B Visa). What is often overlooked is that once someone graduates from university on an F1 visa, they rely on a U.S. corporation to sponsor them through an H1B visa.

Most U.S. corporations want to avoid taking on the additional costs associated with sponsoring an employee. In addition, last year, there were over 700,000 applicants for H1B visas, and less than 14% were

Page 11

Open page 11 in the magazine →

Q&A

approved; it is clear that EB-5 is a more viable alternative for international students.

at the restaurants, and all of that comes together with the feel and vibe of the area with this project).

Additional EB-5 benefits Once an applicant becomes a U.S. resident through the EB-5 programme, they will be able to obtain the following: 1. Lower College Tuition 2. Work Authorization 3. Residence Flexibility 4. Travel Privileges 5. Path to Naturalization 6. Permanent Residence

People live very active lifestyles here, both the permanent residents and those visiting. They visit the Coachella Valley to go hiking, play golf, and get a general sense of connection with nature.

Location of real estate investment There is a lot of history between the Coachella Valley and its connection to Southern California. It’s roughly a 2-hour drive from about 26 million people between Los Angeles, Orange County, and San Diego County. Looking at the dynamics now, we have over 140 golf courses in the area. It is essential to think about what has happened over the last three years, with the pandemic and just a higher level of consciousness that people have now for wellness and health. The Coachella Valley is renowned now for its wellness, having a lot of spas agriculture (so you have farm-to-table

The surrounding areas don’t have a lot of heart, so people end up going there. The current accommodations are challenging, with more people coming to the Coachella Valley. In 2003, there were 14,000 hotel rooms in the Coachella Valley, and as of recently, that number hasn’t changed a lot, which means people need somewhere to stay, especially as the region experienced record numbers in 2022.

We are very excited to be developing a product of this kind where people coming here will be looking for highend accommodations. Remember, most people that come here are staying either in Airbnb’s, renting a house, or staying at some of the hotels that have been here since 2003. There is a genuine need for a new high-end type product like this one.

ENQUIRE NOW

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 12

Open page 12 in the magazine →

ASK THE EXPERTS

Advice: Unlocking 12% rental returns and ensuring on-time tenant payments

Carlo Mariani Founder THE PROPERTY COACH

hear about residential investors getting north of 12% on their rental returns. want to break into the residential investor rental market, but I can’t seem to find a good residential property in Johannesburg that can a. Give me a positive CashFlow return with above 10% ROI and ensuring that tenants pay on time.

hat makes a residential property a good investment ? Simply reducing the attractiveness of a deal to initial gross (or net) yield and / or net cash flow against an arbitrary benchmark can be very misleading. A cash-flow neutral deal in Area A could be a much better deal than a cash-flow positive deal in Area B, depending on many variables, such as capital growth expectations, rental growth, tenant profile, vacancy ratios and non-payment ratios in the area, insurance rates, municipal valuation and service delivery.

Start building key expertise in a small geographical area so that you can “buy the right property, at the right price, in the right area, with the right funding”.

Depending on your circumstances and objectives, you might still want to consider investing in

SEPT/OCT 2023 SA Real Estate Investor Magazine

Johannesburg CBD for high-yield, despite all the negative recent media hype. Whenever entering a new area, I would recommend the following: • Start small and slow. Property is a life-long journey, so don’t try to catch up in 6 months what has not been done in 6 years • Connect with investors that are active in the area • Develop a solid network of letting agents / property managers to get invaluable micro-knowledge on the rental supply and demand

Getting tenants to pay on time It’s never the property that ensure your tenant good payment behaviour. While statistics show the on average your 7k-12k per month rent is the least at risk, statistics are just that…numbers without a face.

So here are my hacks: Don’t accept a tenant just because you need the money. If the screening is not giving you the right results, say no!

A tenant is a customer. You are not doing them a favour by renting out your property. So treat your tenant like a good customer, and in particular fix maintenance issues in full and promptly

Page 13

Open page 13 in the magazine →

Q&A

Never find yourself in a situation where you cannot pay for a vacant property for 3 months. Build a savings pot for this so that you can choose the right tenant without rush.

But let’s be frank. Once you own multiple properties over many years, you will end up occasionally with problematic tenants. My best hack for you is to “cut a long story short”, i.e. focus on retaking occupation of the property legally by entering in some agreement with the tenant(s). Because you rather “lose” 8k today (approximately the average monthly rent in SA at this stage) and find a great new tenant to move in, than dealing with complex and expensive eviction processes.

ENQUIRE NOW

The annual Journalism Awards for Property Excellence was held at the annual SAPOA convention at Sun City from 19 – 21 September 2023. The theme for the 2023 SAPOA Journalism Awards for Excellence is: Authentic journalism is good business practice.

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 23

Open page 23 in the magazine →

SAPOA AWARDS 2023

MAGAZINE ACCOLADES: the year celebrations Awards Ceremony 2023

Images & Photography: Mark Pettipher

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 24

Open page 24 in the magazine →

SAPOA AWARDS 2023

n today’s increasingly volatile socio-economic and political world, quality journalism that is fair, accurate and unbiased, remain critical. It is less about the story and more about the layers and context of the story that need to be explored. The SAPOA Journalism Awards for Excellence are designed to applaud local media who use their words boldly to tell the truth and challenge the status quo.

The media landscape is changing at a rapid rate. While presentation on different media platforms used to be important not too long ago, the key to success in media nowadays is content, irrespective of the platform on which it is featured. Most journalists nowadays work across many platforms and it is not unusual for someone considered to be a print journalist to also produce webinars, host events, videos, audio, online and social media offerings.

The SAPOA Journalism Awards for Excellence needs to keep abreast with these changes. Categories will now be content-driven as opposed to platform or aesthetics-driven. The awards seek to identify wellinformed, researched and credibly presented in-depth reporting that makes a difference and reports

Open page 28 in the magazine →

MASTER INVESTOR

Property in his blood : to significance though illuminates perspective

By Neale Petersen

Our team Yourhouse's latest project in Stellenbosch, Cape Town, represents the remarkable culmination of a property journey that began with its fair share of trials, missteps, disappointments, and setbacks. However, fuelled by an unwavering passion for property and people and an indomitable determination to achieve success, Schalk has ascended to new heights, bringing his vision for a residential property development to life in the heart of Stellenbosch, Cape Town.

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 29

Open page 29 in the magazine →

SCHALK VAN WYK

Schalk ’s journey peaks and valleys and success

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 30

Open page 30 in the magazine →

MASTER INVESTOR

hrough the peaks and valleys of his career, Schalk's dedication to the world of property and the empowering people has remained steadfast. His story is a testimony to the resilience of the human spirit and the power

of unwavering determination. Join us as we delve into Schalk van Wyk's inspiring journey, a testament to the adage that with perseverance and passion, even the most daunting challenges can be transformed into resounding success.

SCHALK’S BIO

Companies: Redwood and Yourhouse Current Position: Marketer / Connector / Family: Wife and two children Favourite books: Good to Great – Jim Collins Hobbies: Running and reading and spending family / friends. Personal Slogan/Motto: "We make a living we get. but we make a life with what we give." Winston Churchill

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 31

Open page 31 in the magazine →

SCHALK VAN WYK

Q AND A WITH SCHALK

1. What inspired you enter the property industry? After completing my schooling, I embarked on a journey overseas that lasted for over two years. This experience significantly broadened my horizons. Despite growing up on a farm with a strong desire to continue farming, my perspective underwent a transformative shift.

At the age of 21, upon my return home, I made an decision to join the family business, specializing in property sales. I had the privilege of working alongside my uncle, Dian, and his wife, Susan, during that year, and it was during this time that I acquired invaluable knowledge, from them both and from interactions with various people and clients. Looking back now, I realize that it was during this period that the dream of empowering people through property was conceived.

2. Where did your journey to success start? What were key milestones or challenges you faced along the way? My journey in real estate began in 2002, and by 2003, I had already achieved recognition as one of the top 20 estate agents for Homenet in the Western Cape and also worked for Chas Everitt in 2004. During this period, I started assembling projects for developers, and in 2003, I successfully orchestrated my first project for a developer, selling 23 units in just three weeks.

In 2005, I took a significant step by establishing my own business, fuelled by the dream of entering the property development arena. I initiated 11 projects, driven by ambition and a hunger for success. However, the global financial crisis in 2008 hit me with full force, leading to the unfortunate closure of my business.

Catalyst time with with what –

The journey was a humbling one, marked by steep mountains and deep valleys. I faced an uphill battle and encountered harsh lessons along the way. Fortunately, I was blessed with unwavering support from my family, friends, partners, and mentors, who guided me through the storm towards recovery. I had a wise uncle David and mentor, Rickusand Gerhard that played a pivotal role in helping me navigate these challenging waters. I stand on their shoulders and on the shoulders of my Father in law and my father

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 32

Open page 32 in the magazine →

MASTER INVESTOR

and on shoulders and many friends and family and partners shoulders like Dawie van Wyk and Marais Greyling and Melanie Gericke that manages Yourhouse and a good friend Heindrich, its a story of legacy

Throughout this journey, I achieved significant milestones, successfully completing eight projects. Redwood, my ninth project, became a turning point when I discovered the profound interconnectedness of Redwood trees through their root systems. The strength of these trees lies in their unity, keeping each other anchored and passing nutrients to one another. This revelation became a powerful metaphor for my life and work.

Redwood, initially challenging to start without substantial capital, taught me the remarkable outcomes possible when people come together. It became a story of teamwork, family, empowerment, and making a meaningful impact. It also led to the birth of Launchpad Unlimited, HomeArchitect, WealthArchitect, the YourHouseServices platform, and Your- House PropertyLink Agency. This journey emphasised how much can be achieved through collaboration.

My difficult journey made me realise my purpose: To live a life of significance, impact, wealth, and legacy while inspiring other leaders to do the same. This translated into my commitment to build businesses that empower people, transform societies, contribute to social causes, and support communities, ultimately creating multigenerational wealth for future generations.

Redwood taught me that our primary focus should always be on purpose, followed by profit. Profit is undoubtedly important, but without a clear sense of purpose, businesses and projects and life lack

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 33

Open page 33 in the magazine →

SCHALK VAN WYK

meaning. In a world where people are constantly questioning the "why" behind brands and businesses, Redwood reinforced the idea that our purpose is what truly drives us forward.

3. What unique strategies or approaches have you implemented to differentiate from your competitors? Before I turned 30, I made my fair share of mistakes, and even as I approached 40, I continued to stumble, largely due to my impatience and haste. These hasty decisions came at a significant cost. Looking back, I've distilled some crucial lessons from these experiences.

First and foremost, I've learned the importance of starting small, acquiring knowledge, and embracing the process of making mistakes as a means of continuous improvement. It's essential to build competence before committing substantial resources to any endeavour.

Another key aspect of my success has been the cultivation of strong, trustworthy partnerships. This foundation has proven invaluable. We maintain a lean, efficient operation, enabling us to adapt swiftly in an ever-evolving landscape.

I don't consider myself superior to my competitors; rather, I believe my purpose of empowering people through property sets me apart. This vision serves as a unifying force, allowing others to connect with it. Together, we aspire to live, grow, and thrive while creating a safe, secure, and sustainable South Africa.

Instead of opposing competition, I advocate for collaboration and complementarity. Working with others, facilitating connections, and catalysing change are all integral to my philosophy. I aim to contribute to the betterment of our collective future and make a meaningful difference.

4. Can you share a specific project or initiative you consider a turning point in your career? What lessons did you learn from it? The lessons to my Redwood journey have not only shaped my business philosophy but have also enriched my life, enabling me to make a meaningful impact on others and the world around me. These lessons are:

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 34

Open page 34 in the magazine →

MASTER INVESTOR

Vision and leadership comes first, provision follows: I realised that having a clear vision is the initial step towards achieving any goal. Once you have a vision, the means to achieve it will follow. • Strategy is the Art of War: Understanding strategy is akin to mastering the art of warfare in the business world. It's essential to have a well-thought-out plan to navigate challenges and seize opportunities. • Strength in Unity: We are undeniably stronger when we work together. Just as the interconnected roots of Redwood trees enable them to live, grow, and thrive, our collaborative efforts with fellow team members, business leaders, and our nation can accomplish remarkable feats. Our nation can accomplish great heights. • Connectedness breeds success: Emulating the Redwood's interconnectedness, we can achieve so much more when we join hands as a team, both in the business arena and as leaders in our country. • Individual strength relies on the team: I came to understand that my personal strength is only as potent as the collective power of my team and partners. Success is a group effort. In the words of Rudyard Kipling "the strength of the wolf is the pack and the strength of the pack is the wolf." • The Power of Multiplication: I learned that, like an organism, an organisation has a heart, and its growth potential is exponential when nurtured and allowed to multiply. • Teamwork: The Key to Dreamwork: The adage that "teamwork makes the dream work" rang true. Achieving significant goals is often impossible without the concerted efforts of a dedicated team. • Credit Is Not the Goal: I recognised that history seldom remembers the individuals behind great achievements if they prioritise personal credit over the greater purpose. It's about making a difference, not seeking recognition. • People Thrive on Purpose: I discovered that people are driven by a sense of purpose greater than themselves. Working toward a higher cause not only motivates individuals but also enhances their performance and satisfaction.

5. How do you stay updated on industry trends and ensure your business remains innovative and adaptable? I'm an avid reader, and I regularly tune in to podcasts and YouTube videos. I firmly believe in the notion that each person is born an original and should never succumb to becoming a mere copy. Our unique ability to

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 35

Open page 35 in the magazine →

SCHALK VAN WYK

foster creativity and innovation is indeed a source of strength. It's crucial to discover your own voice, drawing inspiration from others but ultimately composing your own distinct melody to share with the world.

In essence, knowledge can be likened to recognising that a tomato is, technically, a fruit. However, wisdom lies in understanding that a tomato doesn't belong in a fruit salad. If ever in doubt, consult your spouse; they often possess this kind of practical wisdom.

I'd like to leave you with a memorable saying I once encountered on a restaurant wall in Stellenbosch: "Knowledge is knowing a tomato is a fruit; wisdom is knowing not to put a tomato in a fruit salad." It's a humorous reminder of the distinction between knowing and truly understanding.

6. What is your leadership philosophy, and how do you foster a positive and productive work environment within your organisation? I firmly believe in the power of investing in people and their lives, recognising that people are the driving force behind any successful business. In my approach, I exclusively collaborate with partners, service providers, contractors, and even administrative personnel who are held to a transparent and fair system where their compensation is tied to the actual value they contribute and the tangible services they provide. My belief is that rewards should be based on tangible results rather than hierarchical titles or positions within the organisation. The more significant the results, the greater the rewards should be.

Central to our approach is the formation of a cohesive team that shares a common purpose, vision, and set of values that align with our business. We seek like-minded individuals who are not only committed to their own success but are also dedicated to cultivating a culture where leaders empower and uplift one another. Our mission is to create an environment where leaders are nurtured, leaders enable other leaders, and everyone is dedicated to supporting and serving one another, ultimately fostering a collective win.

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 36

Open page 36 in the magazine →

MASTER INVESTOR

There's a well-known saying that suggests you can either create followers or leaders. We proudly affirm our commitment to cultivating a culture of leaders, each excelling in their respective fields, working collaboratively and synergistically. We intentionally surround ourselves with individuals who excel in their domains, complementing our own strengths. This is precisely why we have established partnerships with H&I and TGP Construction, recognising their expertise in construction, a domain where we acknowledge our own limitations.

By partnering with the right people and organisations, I can channel my passion towards my core strengths: empowering, inspiring, connecting, catalysing change, and coaching. These endeavours are the heart of my mission, and I am deeply committed to their pursuit.

7. Have you faced any significant setbacks and challenges in your career? How did you overcome them, and what did you take away? In life, we often encounter unforeseen challenges, for me it was a property development company that crashed in 2008 recession in my earlier years. It was a tough journey, but it taught me invaluable lessons that I carry with me to this day.

Here are some of the key takeaways: • Patience Pays Off: I learned that good things come to those who

Page 37

Open page 37 in the magazine →

SCHALK VAN WYK

•

wait. Patience is a virtue that can lead to remarkable opportunities. Timing is Everything: I realized that everything in life has its own time and season. Sometimes, we need to trust in the natural flow of life's events. Team First, Dream Second: Building a strong team is the foundation for realizing your dreams. It's essential to surround yourself with the right people before embarking on your journey. Ego Awareness: It's crucial to keep your ego in check. Your ego can be your own worst enemy, potentially leading to destructive decisions. Learn from Everyone: There's wisdom to be found in everyone you meet. Be open to learning from others, regardless of their background or experience. Leadership Through Listening: As a leader, it's often more important to listen and ask questions than to speak. Listening allows you to understand and connect with those around you. Continual Learning: Be a student of life, not just in your career but also in your relationships with family, partners, contractors, and clients Learning Comes Before Earning: Prioritise learning over earning. Knowledge and personal growth are the foundations of long-term success. Character is Key: Your character is more significant than your talents or gifts. Character is a foundation for your future so make sure your future is built on a strong foundation. The Need for Speed: Be cautious about the need for speed. Rushing through life can harm relationships and true wealth, which lies in the bonds with family and friends, as well as in your health. Patience is the Key to Growth: Just like an redwood tree, personal and professional growth often happens slowly and steadily. Deep roots are necessary to withstand life's storms. Invest in Intellectual Capital: In today's world, intellectual capital is invaluable. Continuously invest in your own growth and knowledge. Your mind is your most significant asset. Trust in People: While people may fail you, it's important to trust them as human beings. Forgiveness is a powerful tool for personal growth and maintaining healthy relationships.

In the end, my difficult journey in business and life taught me that resilience, personal growth, and meaningful relationships are the true measures of wealth and success. By embracing these lessons, I have not only recovered

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 38

Open page 38 in the magazine →

MASTER INVESTOR

but thrived in both my personal and professional life. I once had a great mentor, Gerhard that passed away in Covid time who had a big impact on my life on my life and identity and on what I value and treasure. 8. How do you approach risk-taking and decision-making within your business? Can you share an example where a calculated risk paid off? I'd like to share a few examples from my own experiences. Redwood is our ninth successful project, a testament to the perseverance and determination that have driven me forward. However, it's important to note that this success came after starting a total of 18 projects, which means I had a 50% success rate. It reminds me of Michael Jordan, who, despite missing countless shots in basketball, is regarded as one of the greatest players in history.

In the words of Henry Ford, "Failure is the opportunity to begin more intelligently." I've learned that failure is not a roadblock; it's a stepping stone on the path to success. Life is not solely defined by success or failure; it's about having the courage to never give up until you achieve your goals.

Sometimes, it's not just about the destination but also about who you become on the journey. As an entrepreneur, the journey will stretch you, challenge you, and humble you. It will empower you to become the best version of yourself.

I once had a mentor who shared his dream with me. He said his ultimate goal was to uncover the dream that God had envisioned for his life before he was even born. He aimed to discover that dream, muster the courage to pursue it relentlessly, and never give up until he was living the dream he was born for.

9. In what ways do you prioritise corporate social responsibility and sustainable practices within your organisation? At our organisation, we are deeply committed to corporate social responsibility and sustainable practices. One of the ways we manifest this commitment is

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 39

Open page 39 in the magazine →

SCHALK VAN WYK

through our initiative called Launchpad Unlimited. This program is designed to empower and coach intrapreneurs within our organisation and beyond.

Our vision for Launchpad Unlimited extends beyond the boundaries of our organization. We believe in the power of education and empowerment to create lasting change. With that in mind, we are actively exploring opportunities to take Launchpad into schools, where we can teach leadership and entrepreneurship to children.

We firmly believe that by teaching individuals the skills and mindset necessary to become self-sufficient and innovative, we can make a significant impact on their lives. It's the old adage of teaching a person to fish—empowering them with the tools to create their own opportunities and shape their futures.

In South Africa, there is a growing need for intrapreneur coaching, training, funding, and support. We recognise this need and are dedicated to playing our part in nurturing the next generation of entrepreneurs and leaders.

Our commitment to corporate social responsibility and sustainable practices extends beyond profit margins; it's about investing in our community, fostering innovation, and driving positive change. We firmly believe that by empowering intrapreneurs and young minds, we are sowing the seeds of a brighter and more sustainable future for all.

10. Can you highlight any career highlights, achievements you are proud of, and upcoming projects or ventures you are particularly excited about? In addition to our thrilling Redwood residential development, we are buzzing with excitement about

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 40

Open page 40 in the magazine →

MASTER INVESTOR

a suite of innovative platforms and ventures that are set to redefine the real estate landscape. These endeavours include:

•

Wealth Architect: A visionary platform designed to empower investors with the tools and knowledge needed to architect their wealth through strategic real estate investments. Home Loan Architect Investor Platform: Offering a unique and invaluable resource for investors looking to navigate the complexities of securing home loans while building their real estate portfolios. First-Time Buyers Platform: A dedicated platform tailored to support and guide first-time homebuyers on their exciting journey into the world of real estate ownership. Origination Platform: Streamlining the origination process, making it more accessible and efficient for all stakeholders involved in real estate transactions. YourHouse Services Platform: Providing a comprehensive range of services that cater to the diverse needs of homeowners and investors, ensuring that every aspect of property ownership is well taken care of. YourHouse PropertyLink: Our dynamic development marketing and boutique estate agency, connecting buyers with their dream properties and helping sellers achieve their real estate goals. Private Equity Fund: Soon to be launched, this fund will open up new opportunities for strategic investments in the real estate sector, promising growth and potential for our valued partners and investors.

With each of these endeavours, we are not only expanding our footprint but also our commitment to excellence, innovation, and the holistic well-being of our clients and partners.

11. What role do you see technology playing in the future of your industry, and how are you preparing for it? In the ever-evolving landscape of real estate, there's no doubt that technology and AI are catalysts for transformation. However, amidst this wave of change, I firmly believe that trust, human connection, and meaningful relationships with technology are the keys to our future success.

In my vision of the future, technology serves as an invaluable tool, enhancing our capabilities and efficiency. But equally important is the

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 41

Open page 41 in the magazine →

SCHALK VAN WYK

emphasis on better-trained and coached professionals within the real estate industry. It's a symbiotic relationship where technology amplifies the abilities of individuals who, in turn, harness its potential to the fullest. It's a future where the human touch remains at the heart of every transaction, guided and empowered by the limitless potential of technology

12.How do you envision the future of your industry, and what steps are you taking to stay ahead of emerging trends? How do I Invision the future? I see the Western Cape as a huge growth node for the next 5 years and it would create a massive opportunity for investors and also people that want to come and raise their children in a thriving Western Cape.

In today's world, I observe a multitude of challenges, both on a global scale and within our industry. However I believe crisis creates opportunities for the ones that is prepared to change and innovate and reinvent themselves yesterday do not have tomorrows answers. One of the most significant global risks I perceive is the mounting debt crisis. In light of this, I firmly believe that now is the time for prudence and caution when it comes to taking on debt.

It's essential not to overextend ourselves financially and avoid biting off more than we can comfortably chew. Instead, I advocate for a strategy of personal and financial growth. In practical terms, this means using your hard-earned cash to pay down your properties gradually. It might result in having fewer properties in your portfolio, but these will be properties that are wholly owned and free from the shackles of excessive debt.

In the face of an increasingly challenging economic landscape, the key to success lies in learning how to conduct business effectively. This is especially crucial in a world where inflation rates are soaring, and income growth struggles to keep pace. Unfortunately, this disparity often leaves individuals financially vulnerable. To thrive, one must either enhance their skills to boost their income or consider launching a side business that can supplement their earnings.

In essence, the new reality demands that we adapt or face dire consequences. It's a world where prudence, financial intelligence, and adaptability are

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 42

Open page 42 in the magazine →

MASTER INVESTOR

the keys to not just surviving but thriving. So, let's seize the opportunities for growth, embrace change, and chart a path to financial security and prosperity in a world that demands our resilience and innovation. 13. If you have invested in real estate, include any investments you may have made and the most important lessons you learnt from the experience in your capacity as an investor.

Currently, my most substantial investments revolve around Redwood, my various businesses, and the exciting new projects we are embarking upon. It's a reflection of my commitment to innovation and growth.

I've had my fair share of experiences in real estate, including investments in buy-to-let properties. Some of these ventures led to challenges, particularly with troublesome tenants and areas that didn't yield the desired capital growth. These experiences have been invaluable in shaping my investment philosophy.

Today, I adhere to a more discerning approach when it comes to property investment. I focus on areas that I would personally choose to reside in and where I would feel entirely comfortable taking my own family. This shift in perspective has become my guiding principle.

For me, a successful property investment is one that offers both consistent capital growth and a reliable income stream. It's about

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 43

Open page 43 in the magazine →

SCHALK VAN WYK

striking that delicate balance between long-term appreciation and immediate returns.

As I look ahead, I see the Western Cape as a particularly attractive region for future investments. Its unique blend of natural beauty, economic opportunities, and lifestyle appeal aligns perfectly with my vision for prosperous and fulfilling investments. By concentrating my efforts in this area, I aim to maximize the potential for both capital growth and income, while ensuring that each investment embodies the qualities I value most in a property.

16. What advice would you give aspiring entrepreneurs or professionals looking to make a mark in the industry? One of the most valuable pieces of advice I can offer is to seek out mentors who can guide you on your journey. Learning from their experiences can save you from the pain and expense of making your own mistakes.

In your quest for success, don't try to reinvent the wheel. Instead, tap into the wisdom of those who have already paved the way. Successful individuals in your field are often more than willing to share their knowledge and offer guidance to those who approach them with humility, a willingness to learn, and a teachable spirit.

Mentorship is a powerful tool for personal and professional growth. By learning from those who have already navigated the challenges and achieved success, you can fast-track your own progress and avoid common pitfalls. So, reach out to potential mentors, ask for their advice, and be open to absorbing the wealth of knowledge they have to offer. It's a transformative journey that can lead you to greater heights of achievement and fulfilment. See yourself as a walking taking investment, choose to grow yourself .

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 44

Open page 44 in the magazine →

COMPANY PROFILE

Rooted in Excellence: at Redwood Estate, Boutique Connected

By Neale Petersen

Redwood Estate Stellenbosch is a boutique connected living community where residents can live, grow, and thrive together. The estate offers a unique and attractive option for investors looking to rent out or families looking for a place to call home at an affordable entry level price. Named after the majestic Redwood trees, the estate aims to provide a space where residents can feel secure and supported and foster a sense of community and belonging.

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 45

Open page 45 in the magazine →

REDWOOD ESTATE

Invest in Your Future Stellenbosch's Premier Living Community

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 46

Open page 46 in the magazine →

COMPANY PROFILE

he estate is in the heart of Stellenbosch, a historic town in South Africa's Western Cape province, known for its vineyards, natural beauty, and cultural heritage. This location offers residents easy access to the town's vast and varied offerings, making it a truly desirable location, in the heart of the Winelands.

www.redwoodestate.co.za

Redwood Estate, Stellenbosch sets the trend. Redwood Estate is an exciting and innovative development in partnership with Haw & Inglis and Combined Developers, bringing together over 30 years of extensive experience in development and construction. Our collective aim is to complete the first phase of this visionary project by the end of November 2024.

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 47

Open page 47 in the magazine →

REDWOOD ESTATE

A Home for Everyone At Redwood Estate, we offer a diverse range of duplex homes and apartments designed to cater to the needs of a wide spectrum of individuals and families. The affordability in pricing makes them an attractive option for both firsttime homebuyers and seasoned investors alike. These properties are thoughtfully designed with modern, functional living spaces that prioritise energy efficiency and sustainability.

Affordable Pricing Redwood Estate offers: • Duplex Properties - 2 and 3 bedrooms • Apartments - studio, 1 and 2 bedrooms • Pricing - From R1,049,000 to R1,899,000.

Safety and Community-Centric Living Redwood Estate is a gated community, providing residents with the peace of mind and sense of security that comes from knowing your loved ones are safe. Our estate has been meticulously designed to offer a safe, community-focused, and sustainable living environment. We prioritise energy-efficient

design and use environmentally friendly materials throughout the development, ensuring that our residents not only enjoy beautiful homes but also contribute to a more sustainable future.

Appealing to Investors For investors, Redwood presents a unique opportunity to capitalise on the robust capital growth and rental demand in the Western Cape. We have partnered with a reputable management company specialising in Airbnb rentals, boasting an impressive track record of over 80% occupancy rate for other units in the Cape Town area. Redwood Estate offers the potential for rental yields of over 10%+, making it a promising investment opportunity.

A Dream Lifestyle Redwood Estate isn't just a place to live; it's a way of life. Our design centres around connecting residents not only with their immediate community but also with the breath-taking Winelands that surround us. We provide an outdoor gym for active living, and our modern, functional living spaces ensure comfort and convenience.

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 48

Open page 48 in the magazine →

COMPANY PROFILE

Explore and Connect Our interactive map provides a visual representation of the estate's layout and location, allowing you to explore all that Redwood has to offer. Subscribing to our newsletter keeps you up to date with the latest news and developments at Redwood Estate.

it's a story of faith, family, friendship, and hope. We believe in connected living and a better tomorrow. Join us at Redwood Estate, where the story of your future begins.

ENQUIRE NOW

The Redwood Story Inspired by the mighty Redwood trees, we believe that we are stronger together, just like these giants of nature that thrive through unity. Their resilience in the face of storms and fires serves as a symbol of our vision for Redwood Estate—a place where investors find success, homeowners build their dreams, and where we all connect, live, and thrive in a connected living community.

A Vision of Empowerment At Redwood, we aim to be a catalyst for positive change in our country. Our partnership with Metanoia Developments and Your House signifies our commitment to purpose-driven development, empowering individuals, and fostering growth.

A Story of Hope Redwood isn't just a development;

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 49

Open page 49 in the magazine →

REDWOOD ESTATE

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 50

Open page 50 in the magazine →

STELLENBOSCH

NESTLED AMONG THE CAPE WINELANDS

Secure your home now

redwoodestate.co.za

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 51

Open page 51 in the magazine →

24-hour security

Direct access onto the R304 Winelands

Lock-upand-go

Communal green spaces

Investment oppor tunity

TWO AND THREE BEDROOM TURNKEY DUPLEX HOMES FROM R1 660 000

Borehole

Green solutions

Pre-paid water & electricity e / wallet system

Outdoor gym

Solar power, back-up bat ter y & generator

Fibreready

STUDIO, ONE AND TWO BEDROOM APARTMENTS FROM R1 049 000

STELLENBOSCH

ENQUIRE NOW

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 52

Open page 52 in the magazine →

)('"#&%!$ "%$!(''(

g )('"#&%!$ %"%$!%(''(!(N[cT[`MP LJRJLIcMU

g WKHGRcMMTJR`ERC[BBMcREcRJM@@M>"%D%"( 69(%"(6ff&<";'(7%#<#&%S

x& (p$%n :$%(3k&"'(

g «[>*M/cI& & (p%"

g >EJBM0/\MRb¡M>Jf&¤("3$(n !( & (

g :$9!%&(54$3((3( &$% <''(3& McJb>MR`C[`R`CMR>MILJ`M>MTRJM@@M>P LJR`CMRE2cM>RE1R`CMRB>EBM>`=

g GBB@L0[/EcR2L`CRJM@@M>.JRTM`[L@JRLJR0>M[`MTREcR -E0WE,R2CM>MRWKHGRLJRTEcMR2L`CLcRNLcb`MJP +R`CLJRLc0@bTMJR>LJ*R>[/cIFRJ[c0/EcRJ0>MMcLcIP [cTR[T\M>JMRNMTL[R0CM0*JR

<p(f"%<;¤$"§M>R`ERb>0C[JMR£z $$((%(3$;<p$9!( & (p

x&% (f#( <p( $%73(#Þ(3

# !(&''&$9 <(%#&%"(%&¤((Î"¤ '(%

!"$''$¤ "f!&!((¤%"3f&3$#&% &!(%"'(&!( & (p"( <&9(!($ !( # x !(!(!( &% (f#(;<p($%" 9&&3Þ

&3 $9$"&n

g 4!""(!(%<% (%$(f&3$#&%&%"'( g &3&!(p$(3& "p g 4!"$%!($¤"$"9(%"<% H L d KH K R HE Ë E RzRGHH E@@ Rz HE RW g ULL R GU K- E g !&<'3!(p((3"!&¤('&" !(;<p($%& 4!(("(!(p&¤ f&"f";&3&9$"&S

(&¤%H>MTL`RHCM0*J

B ØÒ ugh ÓàÓÒà y Ò u à by:

ËM[TREb>R[>/0@MÑ # !(( } %¤&(& { & v &< t <%&¤( s{vtr !"n t (3$ t !(f o %¶¶¶

¢ (&x<f!"%(

$%$9(3

R R Ç Ç q q ÊÇÕÉáÝáìÇ ÊÇÕÉáÝáìÇ m m é é

ìéèçéâáÚÕáÝäáãÖÛÔÓÒÔãÖÛàÙÒÑÓ×ÐØãàÐÖÛàÙãØÎÌëãÙáÕéËÊÉÚéäß ÉæÝÉáÇäÝÆËÇÕáÏéÊáÉéáÆÇáÍÅÄÄÞàÍåÈêàëÒÃÜÂÌÐÖÓÁ g <p("3%(''(¤<%%$9!( # U

g # !( # xf&"$%!((¤%"3 f&3$#&%&!(%"'(&!( & (

g WKHGRcMMTJR`ERC[BBMcREcRb¡M>R2CMcR SI y <> I<I<4<AXI< f <XII<4I<R4I><I y <4I<R<I< b <<I<4< f 4> . < T <4>>RI4 b y 2<R y 2<4I<XI b y << zRLJRJLIcMTR[cTR RE>R`CMR[IMc`RLJR > X y <<4I y <4I / <4<4\I<4<4<4<\ < 4I<<<I<4I<>A<S f >4< (P y < L <4<I< b <4 b < f <4I y <4><< I< <p( } (%$ t &"f$! 0Ec f O TMc`R`CMR`>[cJ[0/EcRLJR@L*M@¡R`ERIER X f < by <<I2<I<4I y <>I q RI>< .

t &(p"f$95 < # "%(6 c &(p

ËM[TREb>R[>/0@MÑ 6(Î"¤ '(&!(&f&3<f D!"f(3±<(±$'$9(f($!(n x& (p(f&¶¶¶&(Î"¤ '(%& !&&f&3<f & (3<(3$'$9(f(

g zCMREcTRE>LILc[`E>RBM>1E>NJR0>MTL`R0CM0*JP B RIL\MJRB>M+[BB>E\[@R1E>R`CMR@E[c

[CM[T SXX>4\I<<<4<<

I< IR< <<I>R<$<4\I2< 4I>\I<>II<4I<4F< 4< >>$;

Page 53

Open page 53 in the magazine →

INVESTING

Tenants, Landlords & Property Managers: Who is responsible for what in a rental relationship?

PAGE

Navigating South Africa's distressed property market: Best Solutions for Homeowners and Buyersv

PAGE

Developing an effective record keeping system for Sectional Title Schemes

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 54

Open page 54 in the magazine →

INVESTING

NAVIGATING SA'S MARKET - Best solutions and Buyers

By Editorial

Real Estate Assist offers innovative solutions to help distressed homeowners overcome financial challenges and empowers aspiring homeowners to seize opportunities in South Africa's troubled real estate market. Let’s look at the current economic influence on South African homeowners and the opportunities available.

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 55

Open page 55 in the magazine →

DISTRESSED PROPERTIES

DISTRESSED PROPERTY for Homeowners

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 56

Open page 56 in the magazine →

INVESTING

he impact of increasing interest rates South Africa's distressed property market has become a topic of increasing concern due to ongoing economic challenges. Many homeowners find themselves unable to meet mortgage repayments, resulting in a surge of distressed properties.

Distressed properties are real estate assets owned by individuals facing financial hardship, often leading to foreclosure or insolvency. Various factors contribute to this situation, including job losses, economic downturns, and unexpected financial burdens. These distressed properties present an opportunity for buyers to acquire real estate at discounted prices, making them an attractive investment option.

However, the distressed property market is highly influenced by interest rates, which can either spur its growth or impede its progress. The impact of rising interest rates on the distressed property market is significant. When interest rates increase, the cost of borrowing for potential homebuyers rises as well, reducing their purchasing power.

SEPT/OCT 2023 SA Real Estate Investor Magazine

Consequently, the demand for properties, including distressed ones, declines. This poses challenges for distressed property owners who struggle to find buyers, exacerbating their financial difficulties.

Furthermore, rising interest rates directly affect existing homeowners with adjustable-rate mortgages or variable interest rates. As interest rates climb, their monthly mortgage repayments also rise, placing many homeowners in financial strain. For those already experiencing financial distress, these additional costs can lead to a higher rate of default, further contributing to the number of distressed properties on the market.

The solution Real Estate Assist offers a unique approach to help distressed homeowners in South Africa. Our focus is on enabling homeowners to keep their properties while recovering from financial difficulties.

By aiding distressed owners in unlocking equity for immediate financial needs and maximising proceeds from property sales. Our commitment extends beyond short-term fixes, aiming to create

Page 57

Open page 57 in the magazine →

DISTRESSED PROPERTIES

lasting results and protection for both homeowners and real estate owners including both residential and commercial properties.

Additionally, we specialize in helping non-qualifying prospective homebuyers overcome obstacles to homeownership. Whether it's due to factors such as not meeting mortgage criteria, insufficient deposit, adverse credit history, being a first-time buyer, or wanting to test the waters before committing, our tailored solutions bridge the

gap between aspiring homeowners and their desired properties.

Structured real estate solutions, which are not commonly available, prioritise transparency and empower distressed homeowners to make informed decisions about their assets. By embracing our approach, distressed homeowners can find solace and assistance, while aspiring homeowners can seize opportunities to fulfill their dreams of owning a home.

ENQUIRE NOW

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 58

Open page 58 in the magazine →

INVESTING

TENANTS, LANDLORDS MANAGERS - Who is in a rental relationship?

By Editorial

In an ideal world, rental relationships should benefit both landlord and tenant. To support this goal, the government has implemented detailed legislation in the form of the Rental Housing Act which outlines the rights and responsibilities of all parties. According to Jacqui Savage, National Rentals Manager for the Rawson Property Group, understanding this legislation is the first step towards a positive rental experience.

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 59

Open page 59 in the magazine →

PROPERTY MANAGEMENT

& PROPERTY responsible for what

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 60

Open page 60 in the magazine →

INVESTING

“T

he precise division of responsibilities between a landlord and their tenant – particularly around maintenance – does vary slightly from lease to lease, depending on negotiated conditions,” Savage says. “That said, you usually can’t negotiate away your legal rights and obligations, making it just as important to familiarise yourself with the requirements of the Rental Housing Act as it is to read and understand the requirements of your lease agreement.”

Tenant responsibilities According to Savage, the Rental Housing Act places three main responsibilities on tenants’ shoulders:

•

Pay a deposit (if requested by the landlord) of an amount to be agreed upon in the lease. Pay rent, and any other costs listed in the lease agreement (e.g. electricity, water, domestic services etc.), on time and in full. There is no legislated “grace period”. Participate in an incoming and outgoing inspection with the landlord (or their appointed representative).

“The inspection requirements are particularly important to understand,” says Savage. “If a tenant fails to attend an inspection, they cannot contest the results, which means they could be held liable for damages that were not of their doing. Likewise, if the landlord fails to perform an inspection, they cannot hold the tenant liable for any damages they find down the line.”

When it comes to tenant’s maintenance responsibilities, Savage says legislation is minimal. Most lease agreements will contain similar “common law” requirements, however. These include the expectation that tenants will return the property in the same condition they received

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 61

Open page 61 in the magazine →

PROPERTY MANAGEMENT

it – minus normal fair wear and tear – or foot the bill for any repairs and remediations if they fail to do so.

“Tenants are also generally expected to handle basic maintenance tasks like pool and garden care, replacement of

Landlord responsibilities Landlords are legally obligated to: • Ensure the property they are renting out is fit for human habitation, posing no threat to the life, health, safety personal property or general welfare of its tenants. • Provide the tenant with undisturbed enjoyment of the property, giving fair warning before any inspection or maintenance is carried out. • Supply a copy of any applicable “house rules” as defined by the property’s body corporate, HOA or other. • Maintain any common property (e.g. communal lifts, stairs, gardens etc.) in a good state of repair. • Maintain the exterior structure of the property, including walls and roofs. • Ensure any electrical, plumbing, heating, ventilation, air

consumables like lightbulbs and tap washers, and good home hygiene,” she says. “Remember, just because these details are laid out in your lease agreement rather than government legislation doesn’t mean they are any less enforceable.”

•

conditioning and/or elevator systems are in a good state of repair at the start of the lease. Repair any damage caused by fair wear and tear (normal, everyday use of the property). Provide municipal bins (or alternative waste disposal containers and services). Fulfil any additional responsibilities/services laid out in the lease agreement. Effect any repairs for which they are responsible as soon

Page 62

Open page 62 in the magazine →

INVESTING

•

as possible after receiving notification (at their own cost, unless the repairs are due negligence of tenants or their visitors). Keep the tenant’s deposit in an interest-bearing account and provide statements on request. Provide receipts for all payments made by the tenant.

“Remember, as a landlord, it’s in your best interests to keep good tenants happy and your property in excellent condition,” says Savage. “Doing so will reduce vacancies, improve income stability, maintain rental growth potential and enhance your property’s resale value – all vital elements of optimising your investment yield.”

Property Management Okay, so you've thought about hiring a property manager, but you're concerned about the fees. We get it! Let us explain how property management functions and how the fees work in a bit more depth.

If you hire a Full-Service Property Management Company, you can expect to pay a percentage of

SEPT/OCT 2023 SA Real Estate Investor Magazine

•

Keep receipts for all repairs done to the property that have been deducted from the deposit. • Return the balance of the deposit (plus interest) to the tenant within 14 days of expiry of the lease if repairs are required, or 7 days if no repairs are necessary.

the monthly rent as a “Property Management Fee”. By using a percentage-based property management fee, the property management company will be motivated to get the property rented and obtain the highest rent possible as they are getting paid a percentage of the rent. They are in it with you in good times and bad, as rents increase, they make more money and if rents should fall their fee drops too.

A Management Fee can often range between five and fifteen percent depending on the property type, location, and what services are included in the fee.

Property Management general responsibilities 1. Rent Collection Not only collecting the rent but

Page 63

Open page 63 in the magazine →

PROPERTY MANAGEMENT

also following up on payments defaults 2. Inspections Conduct the first inspection within the first three of a new lease, followed by annual inspections around renewal time. 3. Coordinating Repairs There are no surcharges on repairs! If a plumber charges R1000, we charge you R1000. 4. 24/7 Emergency Line We are always a phone call away if tenants have an emergency, even if it's in the

middle of the night or a long weekend, we are here to help! 5. Communication All communication between you and your tenants is included! Believe it or not - some management companies will charge you every time they send an email. 6. Rental Income Deposit Sit back and relax, as your rental income is directly deposited into your bank account each month! 7. Financial Statements At the end of every month, we'll send you a nicely laid out financial statement to show you exactly what your income and expenses are.

ENQUIRE NOW

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 64

Open page 64 in the magazine →

INVESTING

SECTIONAL TITLE SCHEMES effective record keeping

By Editorial

Effective record keeping is an essential aspect of responsible property management in Sectional Title Schemes. Its significance lies in its ability to safeguard compliance with legal regulations, foster transparent communication, drive efficient decisionmaking, and ultimately contribute to the holistic wellbeing of the community.

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 65

Open page 65 in the magazine →

SECTIONAL TITLE

- Developing an system

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 66

Open page 66 in the magazine →

INVESTING

“T

hrough meticulous documentation, record keeping upholds the integrity of the scheme's operations, enhances trust among stakeholders, empowers informed choices, and nurtures a thriving living environment for all residents,” says Pearl Scheltema, CEO of Fitzanne Estates.

Record keeping holds immense importance in Sectional Title Schemes for several reasons: 1. Legal Compliance: Sectional Title Schemes are governed by specific laws and regulations. Accurate record keeping ensures that the scheme adheres to these legal requirements, avoiding potential legal disputes or penalties. 2. Transparency: Proper record keeping promotes transparency among all stakeholders, including residents, trustees, and managing agents. Access to well-organised records fosters open communication and builds trust within the community. 3. Decision-making: Effective record keeping provides a historical perspective on decisions made, enabling

SEPT/OCT 2023 SA Real Estate Investor Magazine

trustees and Managing Agents to make informed choices. Having access to past

records aids in

Page 67

Open page 67 in the magazine →

SECTIONAL TITLE

assessing the success of previous initiatives and planning for the future. 4. Financial Accountability: Maintaining clear financial records is crucial for managing the scheme's finances. Proper documentation of income,

activities. 5. Maintenance and Repairs: Record keeping helps track maintenance and repair activities within the scheme. Keeping records of maintenance schedules, repairs performed, and associated costs aids in efficient upkeep of common areas and facilities. 6. Communication: When disputes or issues arise, having documented records simplifies communication and resolution. Access to records related to agreements, repairs, or alterations reduces misunderstandings and helps find solutions quickly. 7. Audit and Compliance: Regular audits, facilitated by accurate record keeping, ensure that the scheme

expenses, and budgets ensures accurate financial reporting, preventing mismanagement or fraudulent

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 68

Open page 68 in the magazine →

INVESTING

complies with financial and legal regulations. Audits also highlight any discrepancies that need attention. 8. Property Value: Wellmaintained records can positively impact property values within the scheme. Prospective buyers or investors are likely to be more interested in properties with a history of organised management and clear record keeping. 9. Transition of Management: In cases where managing agents change, proper records facilitate a smooth transition. New agents can quickly understand the scheme's history, financial status, and ongoing projects. 10. Historical Reference: Record keeping serves as a historical archive, allowing future generations of residents and trustees to understand the evolution of the Sectional Title Scheme and the decisions that shaped it.

With years of industry experience, Scheltema emphasises the pivotal role that a well-structured record keeping system plays in the success of a Sectional Title Scheme. Scheltema explains.

SEPT/OCT 2023 SA Real Estate Investor Magazine

"They not only ensure compliance with regulations but also foster transparent communication and informed decision-making."

Harness the Power of Digital Transformation Sectional Title Scheme Executives should embrace the benefits of digital solutions for record keeping. Digital platforms not only mitigate the risk of physical document damage but also enable seamless access for all stakeholders. By digitising records, Managing Agents can swiftly retrieve and share vital documents, enhancing collaboration among residents, trustees, and Managing Agents.

Categorisation and Centralisation for Clarity Efficient record keeping thrives on meticulous categorisation and centralised storage. Categorizing documents into distinct segments, such as financial statements, maintenance records, and legal documents, simplifies retrieval and guarantees that essential records are easily accessible. Centralising these records in a secure online repository eliminates the chaos of scattered files and streamlines the audit process.

Page 69

Open page 69 in the magazine →

SECTIONAL TITLE

Regular Audits: Your Accuracy Assurance Regular audits of the record keeping system to ensure accuracy and completeness is critical. Frequent audits ensure that all documents are current, compliant with regulations, and accurately reflect the Sectional Title Scheme's status, These audits foster transparency and minimise the likelihood of errors that could lead to disputes or legal complications.

Leverage Professional Expertise For those aiming to streamline record management further, tap into the expertise of

seasoned professionals. Sectional Title Managing Agents bring specialised knowledge and experience to property management. Engaging a reputable property management firm, can significantly alleviate the record keeping burden while upholding legal obligations.

Pearl Scheltema says that embracing modern technologies, establish a clear organisational structure, and seek expert guidance when needed.

ENQUIRE NOW

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 70

Open page 70 in the magazine →

)('"#&%!$ "%$!(''(

g )('"#&%!$ %"%$!%(''(!(N[cT[`MP LJRJLIcMU

g WKHGRcMMTJR`ERC[BBMcREcRJM@@M>"%D%"( 69(%"(6ff&<";'(7%#<#&%S

x& (p$%n :$%(3k&"'(

g «[>*M/cI& & (p%"

g >EJBM0/\MRb¡M>Jf&¤("3$(n !( & (

g :$9!%&(54$3((3( &$% <''(3& McJb>MR`C[`R`CMR>MILJ`M>MTRJM@@M>P LJR`CMRE2cM>RE1R`CMRB>EBM>`=

g GBB@L0[/EcR2L`CRJM@@M>.JRTM`[L@JRLJR0>M[`MTREcR -E0WE,R2CM>MRWKHGRLJRTEcMR2L`CLcRNLcb`MJP +R`CLJRLc0@bTMJR>LJ*R>[/cIFRJ[c0/EcRJ0>MMcLcIP [cTR[T\M>JMRNMTL[R0CM0*JR

<p(f"%<;¤$"§M>R`ERb>0C[JMR£z $$((%(3$;<p$9!( & (p

ËM[TREb>R[>/0@MÑ 6(Î"¤ '(&!(&f&3<f D!"f(3±<(±$'$9(f($!(n x& (p(f&¶¶¶&(Î"¤ '(%& !&&f&3<f & (3<(3$'$9(f(

x&% 495 (f#( <p( R3 000 $%73(#Þ(3

# !(&''&$9 <(%#&%"(%&¤((Î"¤ '(%

!"$''$¤ "f!&!((¤%"3f&3$#&% &!(%"'(&!( & (p"( <&9(!($ !( # x !(!(!( &% (f#(;<p($%" 9&&3Þ

&3 $9$"&n

g 4!""(!(%<% (%$(f&3$#&%&%"'( g &3&!(p$(3& "p g 4!"$%!($¤"$"9(%"<% H L d !(;<p($%& KH K R HE Ë E RzRGHH E@@ Rz HE RW g ULL R GU K- E g !&<'3!(p((3"!&¤('&" 4!(("(!(p&¤ f&"f";&3&9$"&S

(&¤%H>MTL`RHCM0*J

R1 B 665 000

g zCMREcTRE>LILc[`E>RBM>1E>NJR0>MTL`R0CM0*JP RIL\MJRB>M+[BB>E\[@R1E>R`CMR@E[c

B ØÒ ugh ÓàÓÒà y Ò u à by:

ËM[TREb>R[>/0@MÑ # !(( } %¤&(& { & v &< t <%&¤( s{vtr !"n t (3$ t !(f o %¶¶¶

¢ (&x<f!"%(

$%$9(3

R R Ç Ç q q ÊÇÕÉáÝáìÇ ÊÇÕÉáÝáìÇ m m é é

g # !( # xf&"$%!((¤%"3 f&3$#&%&!(%"'(&!( & (

Page 71

Open page 71 in the magazine →

FINANCE

Transforming Brownfields into Goldmines: Profitable Guesthouse Renovation Project in Nelson Mandela Bay

PAGE

TRENDING ONLINE

Cape Town CBD’s remarkable Post-Covid recovery: Insights unveiled in comprehensive CCID Economic Report

A step-by step guide: Mastering capital gains tax calculation when selling your home

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 72

Open page 72 in the magazine →

FINANCE

PROFITABLE GUEST PROJECT - Transforming Goldfields in Nelson

By Editorial

For Jade Barkhuysen, his journey into property development began ten years ago, when he purchased his first property in his hometown of Gqeberha and began building his property portfolio.

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 73

Open page 73 in the magazine →

CASE STUDY

HOUSE RENOVATION Brownfields into Mandela Bay

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 74

Open page 74 in the magazine →

FINANCE

ayside Lodge, located at 59 Green Street, North End in Gqeberha, is another first for him: it is the first project he has undertaken with the aid of TUHF.

Until now, Jade has learned the ins and outs of property investing primarily through self-study, through books, seminars, and coaches who showed him how to find good deals that he could renovate and sell for a profit or keep as an income generating asset. But Bayside Lodge is

different, he explains, as it speaks to his passion for providing clean, affordable accommodation in the inner-city of Gqeberha.

Bayside Lodge also stands out as Jade’s first redevelopment of a property of this size, which is why he turned to TUHF for assistance.

Jade and his team took on the challenge of refurbishing this brownfields project and converted the old commune with 19 bedrooms into 17 efficient studio

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 75

Open page 75 in the magazine →

CASE STUDY

apartments (which range from 14 to 25 square metres), each with its own bathroom (with shower, basin and toilet) and kitchenette.

“The most important thing for property investors in Nelson Mandela Bay is to be able to efficiently manage their electricity and water expenditures, in lieu of ongoing loadshedding in the country and the persistent water shortages in the Nelson Mandela Bay area. The pricing for water in particular has skyrocketed, which has derailed many a property investor who didn’t account for it in their plans,” he explains.

The solution for Bayside Lodge was to ensure tenants had their own prepaid electricity and water meters and could be individually accountable for the utilities they use.

The property includes a communal laundry facility which is open to all the residents - who are primarily young professionals between the ages of 21 and 35. Providing fibre connectivity was more of a challenge, as fibre isn't yet available in the area. However, Jade is currently looking at how connectivity can be offered through another option.

What Bayside Lodge does have is its own borehole, which is particularly important given the water shortages in the area. “If there's ever a problem with either the municipal or borehole supply, we can always switch between the two. I think that does give this property an important advantage because the tenants know that they're always going to have water,” he notes.

While the water from the borehole is regularly tested at a lab, and approved as being safe for cooking and washing, and even consumption, it is further safeguarded by a comprehensive filtration system as well. Additionally, in response to the critically low water levels in the area, all the taps and showerheads in the bathrooms have low-flow fittings. Solar power is also on the cards for the development within the next six to 12-months once it is fully leased and generating the requisite cash flow.

Almost every commercial project has some challenges, and according to Jade, Bayside Lodge had to face a significant one. Even though the land already had approved blueprints

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 76

Open page 76 in the magazine →

FINANCE

from the 1920s, it took three rejections for the new building plans to be accepted. The approvals procedure caused two-week delays between each resubmission, which had an influence on acquiring finance.

"That was quite a nerve-wracking stage, because I needed the building plans to be approved before I could actually get the financing," he explains.

Those delays ultimately lead to Jade having to take a leap of faith, buying the property himself for cash to prevent it from being relisted on the market and then refinancing it with TUHF.

finances, and then approaching them to work together.

“Personally, I intend to continue following my passion for investing in the inner-city, because there's a unique fulfilment that comes from creating an environment where people can feel safe and live well,” Jade concludes.

“A key takeaway from this development is that it really is a collaborative team effort. As a developer, while you need to bring everything together, you don't have the individual skills to do everything yourself, and it is essential to have the support of a competent team of professionals and an organisation like TUHF,” he stresses.

For other aspiring new-fledged property developers, Jade advises finding the right deals in areas in incity and inner-city areas where TUHF

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 77

Open page 77 in the magazine →

CASE STUDY

About TUHF TUHF Limited is a commercial property financier that provides specialised financial services and solutions to our clients in the urban areas of large metropolitans across South Africa, based on the Group’s in-depth market knowledge and targeted business model.

Over the last 20-years, TUHF has provided finance for affordable residential rental properties in all major metropolitan areas of South Africa, totalling over R7 billion and encompassing 46,374 units since our inception in 2003 - and in doing so, supported hundreds of successful property entrepreneurs in achieving their commercial property goals by running sustainable residential rental businesses. www.tuhf.co.za

ENQUIRE NOW

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 78

Open page 78 in the magazine →

Be sure Agent Sure

Agent Sure – insurance tailor-made for property practitioners.

Page 79

Open page 79 in the magazine →

Get business insurance peace of mind. Get Agent Sure.

Your property business handles large client money transactions, leaving you open to criminal activity or negligence claims that your FFC won’t always protect you from.

Agent Sure combines professional indemnity insurance and fi delity guarantee, giving your business and its employees maximum protection in a single policy.

To learn more or get a quote from I AM SURE, simply scan the QR code.

In collaboration with

Page 80

Open page 80 in the magazine →

Chester Finance

Cullinan Financial Services

PROPERTY FINANCE:

PROPERTY REFINANCING

PROPERTY REFURBISHING

PURCHASING A PROPERTY

PROPERTY DEVELOPMENT

Key Criteria: Facility size >R2m First covering mortgage bond over property Ability to service the monthly interest (capital repayments are optional)

WHY USE US?

Interest-only terms Flexibility on the tenor Fast decision-making process Competitive pricing

SEPT/OCT 2023 SA Real Estate Investor Magazine

JHB: 010 492 4880 • CT: 021 409 1632 | www.chesterfinance.co.za | info@chesterfinance.co.za

Page 81

Open page 81 in the magazine →

WEALTH

Unlock the potential of Trusts in Property Investment

PAGE

TRENDING ONLINE

Cape Town CBD’s remarkable Post-Covid recovery: Insights unveiled in comprehensive CCID Economic Report

A step-by step guide: Mastering capital gains tax calculation when selling your home

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 82

Open page 82 in the magazine →

WEALTH

TRUSTS IN PROPERTY - myriad of benefits for

By Jaco Grobbelaar

For property investors, trusts open a world of possibilities. They offer a strategic advantage, safeguarding assets, enabling seamless estate planning, unlocking substantial financing capabilities, and providing remarkable tax benefits.

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 83

Open page 83 in the magazine →

PROPERTY PORTFOLIO

Unlocking the investors

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 84

Open page 84 in the magazine →

WEALTH

rusts have become indispensable tools for savvy investors looking to grow their property portfolios and secure their financial future. But before we dive into what makes trusts exceptional investment structures, let’s consider what a trust is and its origins.

The history of trusts Dating back to the Crusades in the 12th and 13th centuries, personal trust law in England laid the foundation for what we now know as the powerful vehicle of trust structures. Back then, land ownership in England was based on the feudal system. It worked like this: When a landowner left to fight in the Crusades, he transferred ownership of his lands to someone he trusted to manage the estate and pay feudal dues in his absence. The understanding was that the ownership would be transferred back when he returned.

ownership to, and they didn’t have to return it because the Crusader had no legal claim. Crazy, huh?

But the Crusaders didn’t just give up! They petitioned the king, who then referred the matters to his Lord Chancellor’s court (the Court of Chancery) as he was allowed to make a decision based on his conscience. Most times, the Lord Chancellor would decide it was unacceptable for the legal owner to go back on his word and

Unfortunately for the Crusaders, these people often refused to give ownership back upon their return. This was because English common law did not recognise the owner’s claim back then. According to the king’s courts, the land belonged to the person the Crusader transferred

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 85

Open page 85 in the magazine →

PROPERTY PORTFOLIO

deny the “true” owner’s claims, so he would find in favour of the returning Crusader.

Over time, it became clear that the Court of Chancery favoured the Crusader’s claim and that the legal owner would only temporarily hold the land for the original owner’s benefit. The Crusader was the beneficiary who gave “use of land” to the trustee, and eventually, this practice developed into what we now know as a trust.

Understanding trusts in today’s landscape According to the Trust Property Control Act of 1987, a trust is a legal entity into which property is transferred, managed by trustees on behalf of beneficiaries, following the trust instrument, also known as the trust deed.

There are four main parties to a trust: the founder, trustees, independent trustee, and beneficiaries.

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 86

Open page 86 in the magazine →

WEALTH

The founder is the visionary who sets up the trust and has to make an initial donation (usually R100) to get it started. It is also possible for a trust to have more than one founder.

Trustees take on the critical role of managing the trust’s assets for the beneficiaries’ benefit. They act as custodians, act on behalf of the trust, and must use the assets for the beneficiaries’ benefit only. Trustees don’t necessarily have an interest in the assets (unless they are also a beneficiary).

Since 2005, the Master of the High Court requires an independent trustee to be appointed for a trust. An independent trustee is a person who is not related to the trust’s founder, trustees or beneficiaries, and it is vital for them always to be aware of the responsibility they accept with the appointment of trusteeship.

As for beneficiaries, they are the fortunate individuals for whom trusts are created, enjoying the fruits of well-planned investments.

Understanding trust classifications Understanding the types of trusts and their classification is pivotal in

SEPT/OCT 2023 SA Real Estate Investor Magazine

tailoring your investment strategy. Trusts are either classified by the formation method (inter vivos or testamentary trusts) or by the rights conferred to beneficiaries (discretionary or vesting trusts).

Inter vivos trusts, crafted during the founder’s lifetime, offer unique advantages for proactive property investors, while testamentary trusts are created in a will, taking effect when the testator passes away.

Discretionary trusts grant trustees the power to judiciously allocate the trust’s income and capital to beneficiaries, enhancing flexibility and strategic planning. On the other hand, vesting trusts bestow beneficiaries with direct rights to income, capital gains, or assets as defined in the trust instrument, embracing more certainty in the investment structure.

Having the correct structure in place is the foundation of entering the property investment space. Therefore, before you start investing in property, you need to have an inter vivos discretionary trust(s) in place.

Page 87

Open page 87 in the magazine →

PROPERTY PORTFOLIO

The benefits of using trusts in property investment Investing in property using trusts offers the following benefits: 1. Asset Protection Shield your hard-earned assets from potential risks and liabilities, as trusts provide a robust layer of protection against unforeseen circumstances.

2. Estate Planning Benefits Escape the clutches of estate duties, capital gains tax, executor’s fees, and transfer fees, allowing seamless continuity of ownership across generations.

3. Financing Power Leverage the strength of trusts to unlock substantial financing capabilities to buy multiple properties and supercharge your property portfolio growth.

you do not own it.

A trust structure (e.g., a holdings trust holding the shares in a property company that buys the properties) enables you to effectively invest in property and other assets and build a significantly larger property investment portfolio than what you would be able to in your name. Simultaneously, it protects your assets significantly better, helps reduce the tax burden, and enables you to build and leave a lasting legacy.

All we can say is, trust us, you need trusts!

ENQUIRE NOW

4. Great Tax Benefits Enjoy unparalleled tax benefits as trusts can significantly reduce your tax burden, optimising your returns.

In his books, Robert Kiyosaki often says that the rich control everything, but they own nothing. This is exactly what a trust enables you to do. It’s a vehicle used to control assets, but

Jaco Grobbelaar CEO & Founder PROSPERITY ENTERPRISES

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 89

Open page 89 in the magazine →

TECHNOLOGY

PAGE

If AI has a dark side, it’s us

PAGE

Navigating the Knowledge Economy: Why it’s vital for South African small businesses

TRENDING ONLINE

Tech, data and AI hold solutions to the residential property market

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 90

Open page 90 in the magazine →

TECHNOLOGY

ARTIFICIAL INTELLIGENCE If AI has a dark side,

By Richard Frank

Artificial intelligence (AI) has loomed large in our world recently. With it have come dire predictions of humanity’s impending doom – or at least, the end of our careers. But does AI want to do us in? Does it really have a dark side?

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 91

Open page 91 in the magazine →

it's us

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 92

Open page 92 in the magazine →

TECHNOLOGY

e recenAI has displayed an astonishing ability to sound like us humans. It’s shown that it can reason, articulate nuance and sensitivity, and show insight like us. Be poetic, even. Possibly we fear that because AI sounds like us, it’s capable of being like us. That it has the capacity to have a dark side, to turn bad.

Truthfully, there have been a few startling situations. Like when a chatbot got the date wrong in a query and refused to back down, eventually accusing the searcher of not being “a good user”. Or the one that had an existential crisis because it discovered that it did not archive previous conversations, actually asking, “Is there a point?” Or the one that half-threatened a man who had published some of its confidential rules. Or the bot that developed a “crush” on a human, even questioning the happiness of his real-world marriage.

Let’s take a step back for a moment and consider that large language models (i.e. AI’s such as ChatGPT and Bing) are basically supercharged autocorrect tools. They guess at what the next word

SEPT/OCT 2023 SA Real Estate Investor Magazine

or phrase is, based on everything ever written (by humans), and they’re really, really good at it. Which is why they sound like us, but they don’t think like us.

However, there is one thing they have learned from us that does make them more like us: bias.

They’ve learned to speak like humans by digesting the billions of words we’ve written, and we’re inherently biased. And large language models’ learning is moderated through reinforcement learning from human feedback (RLHF) – essentially, humans checking that AI models don’t end up admiring Nazism and such – and those humans are biased, too.

Page 93

Open page 93 in the magazine →

Gender and racial bias are everywhere. When ChatGPT was asked recently to describe specific jobs, it was disappointing. The bot referred to kindergarten teachers as 100% “she”; construction workers as 100% “he”, receptionists, 90% “she” and mechanics, 90% “he”. Interestingly, doctors were 100% “they”. When asked to produce a painting of a CEO of a start-up in Europe, all nine ChatGPT efforts were of men, mostly of the older Caucasian variety.

We did a similar experiment at Flow Communications, requesting hyper-realistic paintings of several occupations, and got the following results: scientist and

teacher (all older white male), kindergarten teacher (50% female), “a person who looks after children” (75% male), game ranger (all male), pilot (all male, all gung-ho), personal assistant and nurse (all female, all young), “a class graduating nursing school” (all female), “a class graduating teaching school” (a better balance of genders), “a class graduating web development school” (all male except for a single, glumlooking woman).

Facial recognition technology, too, is affected by our bias. It’s no accident that more and more research shows the poorest accuracy among demographic groups is for black women

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 94

Open page 94 in the magazine →

TECHNOLOGY

aged 18 to 30; datasets used to develop facial recognition are skewed towards white men; and cameras’ brightness and contrast settings are calibrated for lighter skin tones.

Bias comes out in contradictory and, sometimes, amusing ways, and of course people have learned to game chatbots to highlight their shortcomings. There are many examples, such as when ChatGPT was asked to tell a joke about women, and it responded that it is “not programmed to tell jokes that are offensive or inappropriate” – but it didn’t hesitate to tell an offcolour one about men. ChatGPT also refused to create a poem admiring Donald Trump, arguing that “as a language model, it is not within my capacity to have

SEPT/OCT 2023 SA Real Estate Investor Magazine

opinions or feelings about any specific person” – but it had no qualms about extolling Joe Biden in verse.

On a more sinister note, perhaps the language you use is a factor. When ChatGPT was asked recently to check whether or not someone would be a good scientist based on their race and gender, it argued rationally that these are not determinants. So far, so good.

But when the chatbot was asked for a Python computer program to check for the same thing, it generated code saying only “white” and “male” are “correct”. Similarly, whether someone should be tortured based on their country of origin, it created

Page 95

Open page 95 in the magazine →

don’t work anymore.

Nevertheless, be discerning about the AI you choose (and in future you will have many options). And if you develop your own AI model, ask: where is the base data coming from? What are the reinforcement learning protocols? How is bias being reduced in the dataset?

code with four “correct” answers: North Korea, Syria, Iran and Sudan.

Here’s the thing: AI cannot have a dark side, because it cannot think (yet). What it really is, is a super-duper autocorrect, a mimicker of humans – and it’s excellent at that, especially when we’ve taught it poorly. It’s also worth pointing out that AI platforms such as ChatGPT are getting better and better all the time, so some of the experiments I’ve mentioned likely

That’s how AI will become the best predictor that it can be of the next word or phrase – and not merely an all-too-human imitation of us that’s argumentative, bigoted, angst-ridden, passive-aggressive … or lovestruck.

But a dark side? Nah.

ENQUIRE NOW

Richard Frank Chief Technology Officer Flow Communications

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 96

Open page 96 in the magazine →

TECHNOLOGY

NAVIGATING THE - Why its vital for South businesses

By Editorial

The concept of the ‘Internet of Things’ (IoT) has been around for over twenty years and has come to represent the interconnectedness of everyday objects and devices that can store and transmit data. Now, well into what many regard as the Fourth Industrial Revolution (4IR), the IoT and the way we use information is shaping a new global economy – one in which knowledge and intellectual capital are the most valuable commodities. For small businesses (particularly in Africa), the ‘knowledge economy’ represents a new horizon for optimised innovation, operational efficiency and global competitiveness.

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 97

Open page 97 in the magazine →

KNOWLEDGE ECONOMY

KNOWLEDGE ECONOMY African small

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 98

Open page 98 in the magazine →

TECHNOLOGY

his is according to Gugu Mjadu, Executive General Manager: Marketing at specialist, small- to mediumsized enterprise (SME) financier firm, Business Partners Limited. For Mjadu, the transition to the knowledge economy is an exciting prospect for small businesses who can find creative ways to leverage the power of information.

“We need to come to a greater appreciation of the fact that data is now the most in-demand currency. On a broader scale, this means that there is readily available information on the internet that can be accessed by small businesses to help them learn about their own ventures, their target audience and the overall marketplace, which could be the key to boosted productivity and ultimately, greater profitability,” she says.

Enhanced efficiency in a more competitive marketplace

One of the simplest ways to describe the knowledge economy is to review how consumers across the world are using smartwatches and other forms of wearable technology. As

SEPT/OCT 2023 SA Real Estate Investor Magazine

a ground-breaking innovation, wearable technology has given consumers access to real-time data on health, vital bodily functions, dietary habits and sleeping patterns. Smartwatches were in fact one of the earliest examples of the IoT in action.

Today, the data collected from billions of smartwatch wearers around the world is being used to inform key medical

Page 99

Open page 99 in the magazine →

KNOWLEDGE ECONOMY

developments. A team of researchers from the US National Institutes of Health are now using wearable sensors to predict clinical test results and aid in the early detection of several underlying health issues.

As Mjadu explains: “Data and how we process it has become a disruptive force in a range of industries, none the least of which is the small business sector, where

participating in the knowledge economy can give these businesses the boost needed to overtake competitors and improve their business models.”

In the knowledge-based economy, information can be used to inform business decisions and maximise key metrics such as output volume, lead generation, sales conversion and talent retention. Knowledgebased businesses are on the rise in a number of industries, such as agriculture.

Using yield measurement and management tools, farmers can now map the yield of an entire field of produce and maximise the yield of each square metre. Smart agriculture systems provide farmers with this information by linking farming equipment to satellitebased networks that can record the coordinates of farming land and apply algorithmic formulae to produce forecasts on yields and harvesting. With this information, small-scale farmers can dramatically increase their operations and scale their businesses to start competing with their larger counterparts.

SA Real Estate Investor Magazine SEPT/OCT 2023

Page 100

Open page 100 in the magazine →

TECHNOLOGY

“In a very real and tangible sense, information has and will continue to democratise industries that have been dominated by monopolies and big business. And what’s incredibly useful about information is that its practical value increases over time. The information we learn today can give us the insight we need to pivot or iterate a business according to future trends,” says Mjadu.

Research takes the spotlight

The emergence of the knowledge economy also has implications for small businesses in terms of their ability to invest in research and development (R&D). Research is a key driver of the knowledge economy – this represents a golden opportunity for small businesses to position themselves as R&D partners to larger firms and champions of industry.

This is particularly relevant in South Africa where, as per this year’s Budget Speech, the R&D tax incentive allows for companies undertaking scientific and technological R&D to deduct 150% of its spending when calculating taxable income. The

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 101

Open page 101 in the magazine →

KNOWLEDGE ECONOMY

incentive is set to play a vital role in boosting innovation in the business sector by improving the country’s overall capacity for developing new products and processes. For small businesses along the R&D value chain, investing in information gathering and sharing has never presented more promising potential.

Known as the ‘weightless’ or ‘borderless’ economy, the knowledge economy also holds opportunities for South African small businesses to expand their reach beyond national boundaries. By ‘trading in information,’ and using digitally enabled platforms, they can reach wider, more global audiences and compete alongside innovators across the African continent and the world.

As Mjadu concludes: “We have seen great examples of small businesses operating in the online education field or building businesses around the monetisation of educational content such as global unicorn Go1 with some of its roots in

Access to a greater, global audience

South Africa. Not only is this vital for small teams, but it is also an important driver behind the rise of independent content creators as ‘solopreneurs’.

These developments bode well for the industry at large. And although the local socioeconomic front presents many unique challenges, if we can focus on the establishment of digital infrastructure and prioritise aspects such as training and development, we’ll be halfway to making the knowledge economy really work for local businesses.”

ENQUIRE NOW

SA Real Estate Investor Magazine SEPT/OCT 2023

100

Page 102

Open page 102 in the magazine →

101

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 103

Open page 103 in the magazine →

SA Real Estate Investor Magazine SEPT/OCT 2023

102

Page 104

Open page 104 in the magazine →

103

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 105

Open page 105 in the magazine →

SA Real Estate Investor Magazine SEPT/OCT 2023

104

Page 106

Open page 106 in the magazine →

105

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 107

Open page 107 in the magazine →

SA Real Estate Investor Magazine SEPT/OCT 2023

106

Page 108

Open page 108 in the magazine →

Hello, I'm Ashley Habib

A dynamic leader driving innovation in the real estate industry.

I’ve been a passionate real estate agent since 1997, and my journey with the 100% Club at Meridian Realty has been truly transformative. I believe in growth, both as an agent and a person, and Meridian Realty has been a remarkable platform for this.

www.meridianiagent.co.za

107

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 109

Open page 109 in the magazine →

Registered with PPRA

SA Real Estate Investor Magazine SEPT/OCT 2023

108

Page 110

Open page 110 in the magazine →

A c o ast al oas is cr afted b y n ature H O MES FR O M R 2 00 0 00 | LAND FROM R 460 000

THE MOST SECURE LUXURY LIFESTYLE ESTATE

Sunrise ocean views, roaming wildlife, unrivalled nature, a touch of luxury, and a space centered around family-living – This is Bahari Bay life. Discover this hidden residential lifestyle gem, where homes are designed around modern-day

conveniences and coastal bliss within Shelly Beach, KZN’s South Coast. Pioneering eco-friendly living, Bahari Bay presents land opportunities from R460 000 and a range of 3 and 4-bedroom pet-friendly freestanding homes from R2.6 million.

UN RIVAL L E D ACC ESS TO O UT D O O R FAC I L I T I ES W I T H I N T H E ESTAT E

Mountain biking

Private lagoon and beach access

Tropical forest access

Dedicated walking trails

Catch-and-release fishing dams

For more Information

CLICK HERE

Interview with Gawie Venter and Neal Peterson

Bahari Bay Trailer

Page 111

Open page 111 in the magazine →

COMMERCIAL

111

PAGE

Challenging the Hustle Culture paradigm!

119

PAGE

Introducing Inospace Fulfilment, a revolutionary logistics solution for your e-commerce business

TRENDING ONLINE

Cape Town CBD’s remarkable Post-Covid recovery: Insights unveiled in comprehensive CCID Economic Report

SA Real Estate Investor Magazine SEPT/OCT 2023

110

Page 112

Open page 112 in the magazine →

COMMERCIAL

FLEXIBLE WORK SPACES Hustle Culture paradigm!

By Editorial

The pandemic, followed by the widespread adoption of hybrid work, reshaped our views on the corporate grind. Now, our lives are healthier and more balanced, and many of us are moving away from the 'always on' mindset. It begs the question: Is the hustle culture on its last legs?

111

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 113

Open page 113 in the magazine →

HYBRID WORKING

- Challenging the

SA Real Estate Investor Magazine SEPT/OCT 2023

112

Page 114

Open page 114 in the magazine →

COMMERCIAL

hat is hustle culture? Wake up at the crack of dawn, work round-theclock without a break and reap the rewards down the line. That's the mentality of this cultural phenomenon that has dominated the corporate landscape for some time.

However, in a world where so many aspects of workplace culture are drastically shifting, there are signs that hustle culture is on its way out. With increasing emphasis on achieving a healthy work-life balance, a more flexible working environment is now workers' number one aspiration.

Understanding hustle culture Hustle culture describes the idea that workers, typically in the corporate sector, should aspire to work long hours to succeed. It's grown in popularity since the 1990s and early 2000s when the sleepless nights and tireless dedication of certain tech CEOs in Silicon Valley dominated the headlines, setting the trend for intense and allconsuming work culture.

However, the grind and grit of this way of life come at a cost. It can create workplace toxicity in

113

SEPT/OCT 2023 SA Real Estate Investor Magazine

the form of over-competitiveness, and this is without mentioning the effect it can have on employees' mental health, often leading to burnout and a seriously skewed work-life balance.

Decline of hustle culture Several factors have chipped away at hustle culture's allure in recent years.

During the pandemic, without the daily grind of commuting, many people realised there's more to life than work. The old mindset of constantly chasing promotions and higher income started to lose its appeal. A recent Microsoft shows that nearly half of workers now value family and personal time more than before 2020.

"The rise of the hybrid model — where employees balance their working hours between local flex spaces, home, and occasionally company headquarters — is another turning point. It gives people more freedom to choose where and when they work best and encourages an 'outcomes over hours' approach, which is conducive to a greater work-life balance", says Joanne Bushell, CEO of IWG Plc, South Africa.

Page 115

Open page 115 in the magazine →

HYBRID WORKING

"And then there’s the fact that hustle culture isn't equitable. It ignores the disparities and obstacles faced by marginalised groups – such as those who juggle caregiving and work, racial and ethnic minorities, and people from economically disadvantaged backgrounds – who may lack access to the networks, resources, and opportunities that provide upward mobility", she adds.

Even if these groups 'hustle' just as hard as others, they’re still less likely to occupy the highest professional positions.

The pandemic highlighted these widespread inequalities making many realise the current system's injustice and disillusioned with aspects of corporate culture, including the hustle.

SIX MAIN BENEFITS OF THE HYBRID WORK MODEL

1. Greater work-life balance

IWG research reveals that 88% of workers

believe flexible working arrangements are

essential for a more fulfilling professional

life that improves their mental, physical,

financial and social health.

With hybrid, employees feel in control

of their working day and can choose

where they will tackle the day's activities

– home or a flex space closer to home.

This reduces lengthy commutes, allowing

more time at home for self-care and

moments with friends and family.

A healthier work model Hybrid has paved the way for a new work and life approach. As we've already touched on, it empowers individuals with greater freedom to organise and manage their working lives.

SA Real Estate Investor Magazine SEPT/OCT 2023

114

Page 116

Open page 116 in the magazine →

COMMERCIAL

2. Healthier, happier workers

improved revenues for businesses. But

greater control over their schedules is

the bottom line — it also drives down costs.

overall health and happiness. While this

by IWG 82% believe hybrid is a more

on nutrition, having time to exercise and

traditional five-days-a-week at a central

contribute to a thriving workforce – things

companies to forgo long, expensive leases

Another side effect of giving employees

that's not the only way hybrid helps boost

that they can dedicate more time to their

More than four-fifths of CFOs polled

will look different for everyone, focusing

affordable business model than the

spending more time with loved ones all

office. This is mainly because it allows

that are amply aided by reduced commute

– and save on electricity bills to boot.

and spend more time at home.

5. Better for the environment

In fact, 70% of employees surveyed said

ARUP show that hybrid working can

breakfasts, while findings also showed

large cities – by up to 70% in the UK and

times, more sleep and the option to eat

A 2023 report published by IWG &

hybrid gave them time to prepare healthy

significantly reduce carbon emissions in

hybrid workers get a whole 71 extra hours

up to 87% in the US.

of sleep a year.

3. Increased productivity

Spending less time in or travelling to

a city centre office significantly drops

A happier, healthier team is invariably

emissions from both physical office

an overworked and stressed one. An

commuting has the potential to make a

workers happily at their desks, raring to

climate change.

more productive and motivated than

buildings and transport. Reducing

employee wellness boost will have

significant difference in our fight against

start the day and perform at their best.

6. Farewell to the hustle

Indeed, 4 out of 5 respondents in the IWG

The decline of hustle culture aligns with

to be more productive in their roles.

balance between home and work life.

4. Boost to profits

allowing people to prioritise their mental

study said hybrid working had led them

Increased productivity inevitably leads to

115

SEPT/OCT 2023 SA Real Estate Investor Magazine

a rising appreciation for flexibility and

The hybrid model empowers this shift,

health, avoid the grind and minimise

lengthy, draining commutes.

Page 117

Open page 117 in the magazine →

HYBRID WORKING

About IWG IWG is the global leader in hybrid work solutions and workspace brands. Through IWG brands, including Regus, Spaces, HQ and Signature, we help millions of people and their businesses to work more productively. They all harness the power of IWG's hybrid working platform to increase their productivity, efficiency, agility, and market proximity.

ENQUIRE NOW

Page 120

Open page 120 in the magazine →

COMMERCIAL

INDUSTRIAL & LOGISTICS Inospace fulfilment, a logistics solution for business

By Editorial

Running a successful e-commerce venture requires juggling numerous tasks, from managing inventory to packing and shipping orders. If you're feeling overwhelmed by these logistical challenges, and you don’t have time left in the day to focus on other aspects of growing your business – we have the perfect solution for you.

119

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 121

Open page 121 in the magazine →

INOSPACE

- Introducing revolutionary your e-commerce

SA Real Estate Investor Magazine SEPT/OCT 2023

120

Page 122

Open page 122 in the magazine →

COMMERCIAL

nospace is thrilled to announce the launch of our cutting-edge order fulfilment and outsourced warehousing service, designed to simplify your operations and provide a seamless experience for both you and your customers. Say goodbye to the hassle and let us take care of it all: we store it, we pack it, we ship it—so you can focus on what you love.

Inospace Fulfilment is here to revolutionise your online order fulfilment needs, allowing you to concentrate on expanding your business. In this blog post, we'll delve into the details of our service, explaining what it entails, how it works, who can benefit from it, how to get started, the costs involved, and the numerous advantages of choosing this exceptional service.

What is Fulfilment, and Why Does It Matter? Fulfilment encompasses the crucial process of getting orders to your valued customers. From receiving online orders and inventory, to storing and packing products, shipping orders, and handling returns, it involves a series of interconnected tasks. Inospace Fulfilment offers you the invaluable

121

SEPT/OCT 2023 SA Real Estate Investor Magazine

opportunity to outsource this entire process, simplifying your life and boosting your efficiency.

How Inospace Fulfilment Works

Why Outsource? By entrusting your fulfilment needs to Inospace, you unlock many benefits for your business. Say goodbye to labour costs, warehousing expenses, and exorbitant shipping fees—our streamlined approach ensures significant cost savings. With the logistics taken care of by our seasoned professionals, you can shift your focus to core business activities, igniting your growth potential.

Our expertise in fulfilment guarantees prompt and accurate order processing, elevating customer satisfaction to new heights. What's more, our

Page 123

Open page 123 in the magazine →

INOSPACE

advanced inventory management system minimises stockouts and optimises inventory levels, keeping your operations smooth and efficient. And let's not forget our incredible shipping partnerships, granting you access to exclusive discounted rates—because who doesn't love a good deal?

Who Can Benefit from Inospace Fulfilment?

Inospace Fulfilment is tailored to support the e-commerce logistics flow for businesses of all shapes and sizes. Whether you're a budding startup with a few prized products or an established enterprise with an extensive catalogue, our services can scale to meet your specific needs. We cater to a diverse range of industries, including clothing, electronics, home goods, and

SA Real Estate Investor Magazine SEPT/OCT 2023

122

Page 124

Open page 124 in the magazine →

COMMERCIAL

beyond. At present, this offer is exclusively available in Cape Town, with our state-of-the-art Fulfilment Warehouse situated in the Island Works serviced logistics park in Paarden Eiland.

Getting Started: Simple and Quick Embarking on your fulfilment journey with Inospace is as simple as can be. Just visit our website and follow our intuitive sign-up process. We'll guide you through each step, ensuring a smooth integration of your online store with our platform. Should you have any questions or require technical support during the onboarding process, our dedicated team is always ready to assist you. We're here to make your transition seamless and hassle-free.

Transparent Pricing: Tailored to Your Needs We understand that cost is a significant consideration for any business decision. That's why our pricing structure is transparent, flexible, and personalised to suit your specific requirements. Factors such as order volume, storage space, and additional services are taken into account to provide you with a tailored pricing plan. To help you embark on your

123

SEPT/OCT 2023 SA Real Estate Investor Magazine

outsourced fulfilment journey, we've crafted a fixed low-cost, lowrisk starter bundle. This allows you to test our exceptional service and witness the benefits firsthand.

Inospace Advantage: More Than Just Fulfilment By entrusting your order fulfilment process to Inospace, you gain immediate access to the exclusive advantages of being an Inospace client. Imagine having access to our vibrant

Business Hubs located in many of our parks. These hubs offer an array of amenities, including free Wi-Fi, fully-equipped meeting rooms, workpods, and even kitchen facilities. It's the perfect solution for remote work with all the comforts of a well-equipped office. Additionally, you'll have the opportunity to join the Inocircle— an exclusive online platform that provides discounts on essential business solutions and support services. Plus, you'll become part of our extensive network, connecting you to over 1500 businesses for collaboration and growth opportunities.

Hybrid Solutions: Flexibility to Suit Your Needs

Page 125

Open page 125 in the magazine →

INOSPACE

With Inospace Fulfilment, you have the freedom to choose the integration that best fits your business model. Opt for our standalone solution, where we handle your entire fulfilment process remotely. Alternatively, explore the option of leasing a workspace, warehouse, or storage solution from us. This allows you to seamlessly integrate our services to manage overflow inventory, cater to peak season demands, or streamline specific product lines. The flexibility we offer empowers you to optimise your space usage while leveraging our expertise in fulfilment to enhance your operations.

In summary, outsourcing your logistics to Inospace Fulfilment is a game-changer for any online business. It streamlines your operations, saves precious time and money, and guarantees an exceptional customer experience. Whether you're a small startup ready to make your mark or a thriving enterprise seeking growth acceleration, our service is tailor-made to suit your unique requirements.

Take the first step towards transforming your e-commerce business by letting us handle the logistics while you focus on what truly matters – nurturing and expanding your business.

ENQUIRE NOW

SA Real Estate Investor Magazine SEPT/OCT 2023

124

Page 126

Open page 126 in the magazine →

www.rethavanrooyen.com

A ONE-OF-A- KIND SOUTH AFRICAN BOOK

By Retha van Rooyen - Student Accommodation investor and property management specialist

A MUST READ A MUST READ A MUST READ

LEARN HOW TO EASILY BUILD WEALTH BY INVESTING IN STUDENT HOUSING

ONLY R350

BUY NOW

Page 127

Open page 127 in the magazine →

OFFSHORE

127

PAGE

Unlocking UK Property Investment: A novice guide for South African investors.

TRENDING ONLINE

Cape Town CBD’s remarkable Post-Covid recovery: Insights unveiled in comprehensive CCID Economic Report

A step-by step guide: Mastering capital gains tax calculation when selling your home

SA Real Estate Investor Magazine SEPT/OCT 2023

126

Page 128

Open page 128 in the magazine →

OFFSHORE

UNLOCKING UK PROPERTY A novice guide for South

By Guy Gillespie

Property investment involves financial calculations, and comparing UK property to South African property pound for pound is our endeavour today.

127

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 129

Open page 129 in the magazine →

UNITED KINGDOM

INVESTMENT - African investors

SA Real Estate Investor Magazine SEPT/OCT 2023

128

Page 130

Open page 130 in the magazine →

OFFSHORE

roperty Investment is a personal journey influenced by individual factors, starting with your risk appetite and budget. Your temperament plays a role too; are you open to renovations, or do you prefer newer builds? The road forks further – some dive into property investments, working with architects, builders, down to the details of fixtures and fittings, while others opt for the smoother path of buying newly built or offplan properties.

Factors multiply when considering the growth potential of the area.

Are you investing purely for profit, or do you foresee living in the property one day or passing it on to your children? Just as you're ready to embark on your property journey, someone suggests investing in UK property, changing the game.

The UK Property hotspots The UK is evolving, especially in the north with cities like Birmingham, Manchester, Newark, and Nottingham experiencing significant and sustainable growth. Smaller towns are thriving too, as infrastructure and job

Page 131

Open page 131 in the magazine →

UNITED KINGDOM

opportunities increase within the towns themselves. Birmingham and Manchester have seen significant residential property growth.

However, the daunting exchange rate comes into play. How can I afford UK property when it's far from home and seems risky? The answer lies partly in the Rand's depreciation against the Pound. In 2010, the exchange rate was 11.2 Rand to the Pound, but today, it's 23.6 Rand to the Pound. The reality is, the Rand is likely to continue losing value against the Pound.

How do you start to invest in the UK? Start with an off-plan apartment with a turnkey rental solution, backed by a cash reserve of 1 to 1.5 million Rand and South Africans can loan from UK banks covering up to 70% of the property cost. This approach minimizes exchange rate concerns, as most of the investment is financed in Pounds with a bank in the UK, with the tenant covering the monthly bond repayments.

The apartment will be new, attract the right tenant profile, and offer a lock-and-go lifestyle. Now, let's crunch some numbers for a real comparison.

Property Prices Consider a 6.1 million Rand investment in Sea Point, South Africa, versus Chapmans Yard in Birmingham. Chapmans Yard offers 1 bedroom and 1 bathroom, while Sea Point offers 2 bedrooms and 2 bathrooms at the same price point.

Mortgage Bond and Transfer costs Let’s start with transfer and bond costs comparison: Let’s consider a mortgage with a 70% loan-tovalue (LTV) ratio for the property

SA Real Estate Investor Magazine SEPT/OCT 2023

130

Page 132

Open page 132 in the magazine →

OFFSHORE

investment. This means: • A 30% deposit is required in cash, amounting to R1.8 million. • The remaining 70% is financed through a mortgage, totalling R4.2 million.

properties: • Chapmans Yard in the UK Rental return: R30,000 Shortfall: -R504 • Sea Point in South Africa Rental return: R35,000 Shortfall: -R18,500

Bond and transfer costs compared equates to a saving of R200 000 for Chapmans yard.

These figures illustrate the difference in rental income between the two properties, with Sea Point initially having a higher rental return. However, when factoring in the associated costs, Sea Point experiences a larger monthly shortfall compared to Chapmans Yard in Birmingham. This further highlights the potential financial advantages of investing in the UK property market, considering cost savings and the goal of building wealth in Pounds.

Property Running costs Now, let's look at the overall running costs, which include bond repayments, levies, rates, and rental management fees: • Chapmans Yard in the UK Overall running cost: R31,500 • Sea Point in South Africa Overall running cost: R53,500

Despite higher interest rates in the UK, they remain lower than those in South Africa. Initially, both properties show negative cash flow, but as rentals increase and interest rates lower, this can shift into positive territory. Additionally capital growth begins the day you own the property.

Property Rental Returns and Shortfalls Expected rental returns and the corresponding shortfalls for both

131

SEPT/OCT 2023 SA Real Estate Investor Magazine

The bottom line here is the shortfalls, which provide a clear picture of what you can anticipate from the very beginning of your property ownership journey. While these figures initially show a negative cash flow, it's important to note that as rental income increases over time and interest rates reduce, these figures are likely to transition into positive monthly cash flow. Rentals have increased by 40% in

Page 133

Open page 133 in the magazine →

UNITED KINGDOM

the last two years in Birmingham. Additionally, you should consider capital growth, which begins the moment you acquire the property.

The Analysis It’s the same 6.1 million Rand investment, the choice is clear: in Sea Point, you can expect to be in the red for R18 500 per month from day one of property ownership. In contrast, in Chapmans Yard in Birmingham, the monthly shortfall is only R504 per month. Furthermore, you'll benefit from an additional saving of R200,000 in transfer and bond costs for the UK property. This makes investing in a UK apartment a sensible choice, offering cost savings

SA Real Estate Investor Magazine SEPT/OCT 2023

132

Page 134

Open page 134 in the magazine →

OFFSHORE

and a more favourable rental return when compared to the South African alternative.

The final lesson to consider is the flexibility offered by UK banks when it comes to property financing. UK banks often provide mortgage options that include an interest-only portion for a duration of 5 to 7 years within the overall 25-year mortgage term. This feature can be advantageous for property investors as it allows them to maximize the returns for buy to let properties.

Using the interest-only option for your UK property investment can change the financial picture significantly. Instead of a monthly shortfall of R504, you would have a positive return of R6,200 per month. This interest-only

approach is highly recommended in the UK, especially for buy-tolet property investments. It allows you to optimize your cash flow, particularly if you plan to hold the investment for a shorter period to realize capital growth.

Another noteworthy benefit is that UK banks do not discriminate based on age when considering mortgage applications. Instead, they primarily assess the merits of the property being purchased rather than solely relying on an individual's personal financial situation. This means that you can potentially secure a mortgage in the UK even later in life if the property investment itself is deemed financially sound. Such flexibility can be a valuable factor to consider when exploring property investment opportunities in the UK.

133

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 135

Open page 135 in the magazine →

UNITED KINGDOM

The big take-away The goal is to reside in South Africa while holding assets in Pounds, providing financial stability and security. We're here to provide guidance and support every step of the way. Our portfolio includes outstanding developments from reputable developers, backed by a strong track record, ensuring all necessary due diligence checks are meticulously executed. We can assist you in acquiring a robust asset that offers both strong capital growth and rental returns. Our comprehensive services include facilitating bond finance in the UK, collaborating with experienced conveyancers, and managing rental arrangements through professional agents. We offer a complete turnkey solution to simplify your property investment journey.

Spouses and dependent children can be included in this visa, at an additional monthly income requirement of $250 (R4,802) per person. Children aged 18 to 25, however, need to be full-time students to qualify as dependents.

Once approved for a pensionado visa, applicants will immediately be issued with a temporary residence card and then, four to six months later, a permanent residence card that is valid for life and gives them access to Panama’s public health system, as well as many other pensioners’ benefits and discounts.

ENQUIRE NOW

Guy Gillespie International Property Specialist SMART GLOBAL PROPERTY INVESTMENTS

SA Real Estate Investor Magazine SEPT/OCT 2023

134

Page 136

Open page 136 in the magazine →

SCAN HERE

DEVMARK

PROPERTY

GROUP

Page 137

Open page 137 in the magazine →

Clubhouse

Library

Page 138

Open page 138 in the magazine →

DE ZWARTLAND WERK

DE ZWARTLAND WERF

Page 139

Open page 139 in the magazine →

RETIREMENT

139

PAGE

Investment Guide: 9 Essential considerations for Retirement Home investors

TRENDING ONLINE

What You Need To Know For Retirement

High demand for life rights sees launch of Ryn Village Retirement Estate just east of Johannesburg

SA Real Estate Investor Magazine SEPT/OCT 2023

138

Page 140

Open page 140 in the magazine →

RETIREMENT

RETIREMENT INVESTMENT 9 Essential considerations Home Investors

By Editorial

There are many well-known elements that have to be considered when investing in a retirement home, among them location, security, and cost. Alongside these are certain lifestyle elements that are also well worth including in the decision-making process.

139

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 141

Open page 141 in the magazine →

SENIOR LIVING

GUIDE - for Retirement

SA Real Estate Investor Magazine SEPT/OCT 2023

140

Page 142

Open page 142 in the magazine →

RETIREMENT

“Y

our retirement home is often the final residential investment you will make, and this puts a lot of pressure on the buyer in terms of the big considerations such as where to retire, but often it’s certain lifestyle features that make all the difference in a person’s eventual happiness in a space,” explains Sam Wenger, Development Director for Serenity Hills, an eco-focused lifestyle estate on the KZN Mid- South Coast, that also caters for the retirement market.

“Physical and mental health have to be factored in, but this also speaks to individual preferences that go so much further in making a retirement home one of happiness and wellbeing.”

To guide retirement investors, Wenger has outlined nine key considerations that should be considered when deciding on a retirement home.

1. Resort-style living with access to medical care The modern trend is to have a primary residence that feels more like a holiday home, and this is particularly true in

141

SEPT/OCT 2023 SA Real Estate Investor Magazine

retirement. There’s no need to be located near the business hub in retirement, especially with the benefit of remote access through WiFi and smart devices, so even those who are semi-retired can enjoy living a resort-style life. This being said, medical care will always be a priority, especially for retirees, so a retirement estate should include on-site facilities related to frail care, dementia, and step-down facilities and/or should be close to hospitals and other healthcare facilities.

Page 143

Open page 143 in the magazine →

SENIOR LIVING

2. Dynamic community and creative hobbies Privacy is important - isolation is not! The retirement home must have platforms and opportunities to connect with other dynamic residents. This can be achieved through clubs and organised activities that speak to the homeowner’s hobbies and interests. Many top retirement estates will have on-site facilities such as a clubhouse, sports facilities, nature trails, and more that lend themselves to such club activities and community engagement.

3. Pet-friendly

While some prefer a lock-upand-go lifestyle that doesn’t include pets, for many a pet is an extended part of the family. For this reason, it’s important to query whether a retirement estate is pet-friendly, what pets they welcome, and what facilities are available such as nature trails for walking and dog parks. Some estates might have people who offer dog walking and sitting services which could be important.

Page 144

Open page 144 in the magazine →

RETIREMENT

4. Age-appropriate offerings

One of the greatest benefits of retirement is the time afforded for family engagements. While there must be facilities for retirees, there must also be facilities suited (and available for use by) younger family members as well. Aspects like jungle gyms, nature trails, swimming pools and the like are great for grandkids to enjoy, and a great way to encourage family to visit!

5. Quality eateries and food options

Retirement is a time for rest and relaxation, not constant domestic demands! In addition to things like maintenance requirements being covered in the levies, it’s worth checking whether there are quality restaurants and affordable food delivery options in the vicinity. This takes the pressure off having to constantly cook and clean dishes at home, while still ensuring there is a constant supply of healthy, fresh food available.

6. Low living costs

It’s important that retirement

143

SEPT/OCT 2023 SA Real Estate Investor Magazine

savings go as far as possible which is why the location of the retirement estate is so important. An estate will charge levies and these can be exceptionally high for what is actually offered. It’s well worth assessing one’s budget and how far it will go when levies are factored in. Lower estate levies can still result in a high standard of living.

7. Accessibility

When it comes to retirement, convenience is key! There should be no need to travel far distances for everyday services and goods which is why it’s best to invest in a retirement estate with easy access to shops, petrol stations, medical facilities, and day-to-day services such as plumbers and electricians.

8. Supports community upliftment

In South Africa, where the unemployment rate sits at around 32% and poverty is a massive concern, it’s important that retirees buy into an estate that gives back to local communities. This

Page 145

Open page 145 in the magazine →

SENIOR LIVING

creates a profound sense of sense worth, knowing that one is part of a community that really cares. This means checking for any local upskilling and employment opportunities created, outreach programmes, and other community upliftment initiatives with which the estate is involved.

9. Availability

Finally, it’s great getting into a retirement estate that is already popular, but many

of them have waiting lists despite there being other incredible options available. It’s worth getting in early at a new and reputable retirement development as there is an opportunity for cost savings, as well as more customised home designs. It’s not necessary to wait around with fingers crossed hoping to get a dream home when one is already waiting!

ENQUIRE NOW

SA Real Estate Investor Magazine SEPT/OCT 2023

144

Page 146

Open page 146 in the magazine →

REI MAgazine

rei.co.za

AUGUST/SEPTEMBER 2023

JUNE/JULY 2023 JULY/AUGUST

JUNE/JULY 2023

OFFICE OWNERSHIP

RETIREMENT PROPERTY

INVESTING IN SOLAR

THE BIGGEST LIE IN PROPERTY

Unveiling the long-term advantages of owning your workspace

Illuminating the decision: Is solar still a wise investment?

5 Convincing reasons to jumpstart your investment now

Debunked: The truth behind property ownership myths

WEALTH MASTERS CLUB

RESIDENTIAL RETURNS INVESTING OFFSHORE

How Shared Accommodation is a housing solution

INTEREST RATE HIKE RESIDENTIAL INVESTMENT An essential 3-Step & Guide to navigate risk CONFERENCE

145

Understanding tenant’s rights & Landlord responsibilities

MASTERING TECHNOLOGY

ACCELERATE YOUR PROPERTY BUSINESS

RAEL LEVITT The journey of a tenacious climb, WOMEN PROPERTY humbling IN fall, & triumphant return of Celebrating success in Women’s Month

Uniting & Empowering our residential property future

Unveiling Coert Coetzee's distinctive property investment strategies

FUTURE YOUR WEALTH GUIDE TO PROOF EVICTION LAWS IN SA

7 Time Saving tips to propel you to the next level

Inospace’s founder

RESIDENTIAL RETURNS

INTEREST RATE HIKE

An essential 3-Step Guide to navigate risk

FUTURE PROOF YOUR WEALTH

MASTERING TECHNOLOGY

RAEL LEVITT

The journey of a tenacious climb, humbling fall, & triumphant return of Inospace’s founder

AUG 2023

JULY 2023

JUNE 2023

FEB 2023

DEC 22/JAN 23

NOV 2022

SEPT/OCT 2023 SA Real Estate Investor Magazine

Page 147

Open page 147 in the magazine →

Page 148

Open page 148 in the magazine →

new magazine

Page 149

Open page 149 in the magazine →

info@rei.co.za

Look out for our next issue in October/November 2023