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MEET THE

TEAM

NEALE PETERSEN

MARISA GEORGE

GRAHAM MILLER

Founder & Editor-at-large neale@rei.co.za

Accounts Manager marisa@rei.co.za

Website Specialist Graham@rei.co.za

ASHEEQ CADER

PAUL VAN RIJSEWIJK

Digital Strategist asheeq@rei.co.za

Senior Designer paul@rei.co.za

CONTRIBUTORS

Bruno Simao Mark Connett Robin Booth Jason Lee Andrew Walker Khali Masooane

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Nomfundo Molemohi Bradd Bendall Schalk van der Merwe Renier Kriek Eric Nienaber Gerhard van der Westhuizen

REI MAGAZINE AUGUST

Jenny Ellinas Dean Parata

AUGUST MAG 2024

WEBSITE

www.rei.co.za

ADVERTISING

+27 21 761 3848

info@rei.co.za

PUBLISHERS

READERSHIP

CIRCULATION

DISCLAIMER: All rights are reserved. No portion of this publication may be reproduced without prior written approval. The opinions in this publication are those of the contributors and authors. The publisher makes no guarantees or assurances regarding any goods or services advertised or published. Prospective investors should always consult their own advisors, accountants, or attorneys before investing.

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EDITOR’S VIEWPOINT

Olympian Dedication in Real Estate:

Achieving success through Clarity

As the world celebrated the extraordinary performances at the Paris Olympics, we were reminded of the dedication and discipline required to achieve such excellence. Olympians invest years of rigorous training and sacrifice for the chance to stand on the podium and be recognized as the best. Their achievements, measured in gold medals, serve as a powerful parallel to our pursuit of success in real estate investing and property management.

Our version of the Olympic podium is not adorned with medals but with the fulfilment of our investment goals and the success of our property ventures. The Reside Awards, held last month at the Sandton Convention Centre, was our own Olympian event. It showcased the outstanding achievements in the residential real estate sector this year, with a high calibre of entries that highlighted the importance of recognizing excellence.

These awards continue to drive industry standards forward in residential development and investment. Congratulations to all winners, especially Crossways Farm Village in the Eastern Cape for their Award for Residential Development of 2024, epitomizing sustainable rural community developments.

Here are six key strategies to guide you toward success: 1.Define Your Investment Goals: Whether you seek steady rental income, long-term capital growth, or both, having a well-defined goal tailors your investment strategy to your financial aspirations.

2.Focus on Fundamentals and Understand the Investment: Stick to core principles while deeply understanding your chosen investment.

3.Diversify Your Information Sources: Gather insights from multiple reputable sources, including market reports and industry experts. This cross-checking helps reduce biases, leading to more informed decision-making.

4.Ensuring Immediate Profitability: Determine if your investment offers immediate positive cash flow and potential for appreciation, avoiding the misconception that returns will only materialise after years.

5.Act on Results, Not Opinions: Base your decisions on concrete data and outcomes. Evaluate market demand and address it with a results-driven approach rather than relying solely on subjective opinions.

6.Embrace Creativity and Focus on Practical Solutions: Seek innovative, non-traditional solutions to set your investments apart. Consider unique strategies like rent-to-rent models or leveraging platforms like Airbnb to enhance your property’s value.

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REI MAGAZINE AUGUST

Crossways Farm Village Founders Pat & Dr Chris Mulder winners of Residential Development Estate of 2024 alongside Neale Petersen of REI at the 2024 Reside Awards at Sandton Convention Centre

MASTER QUOTE

“Everyone wants a piece of land. It’s the only sure investment. It can never depreciate like a car or washing machine. Land will only double its value in ten years.”

Sam Shepard

As we continue to explore groundbreaking ideas, we encourage you to sign up for our weekly newsletters, webinars, and events.

Together, let’s channel the spirit of Olympic dedication into our real estate endeavours and strive for excellence in every investment.

Neale Petersen

Founder & Editor-In-Chief

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CONTENTS

MEET THE TEAM

8

4

NEWS

124 - 135

REAL ESTATE INVESTOR

140 - 141

EDITOR’S VIEWPOINT

6 - 7

ASK THE EXPERT

10 - 12

MAGAZINE ARCHIVES

14 - 15

MASTER INVESTOR

16 - 27

COMPANY PROFILE

28 - 31

INVESTING

32 - 40

RESIDENTIAL

42 - 59

FINANCE

60 - 73

PROPERTY MANAGEMENT

74 - 89

TECHNOLOGY

92 - 95

COMMERCIAL

96 - 105

OFFSHORE

106 - 113

I’m not perfect

WEALTH

114 - 123

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REI MAGAZINE AUGUST

12

26

52

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RETHA VAN ROOYEN

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ASK THE EXPERTS

Bruno Simao

Founder & Managing Partner:

BSA Law

Q uestion

from a Property Owner:

I have just moved into our new home and discovered that a room, which we use as an office and potential spare bedroom, was added without approval from the local authority. The municipality has By Jaco Grobbelaar informed us that the seller’s building works were unapproved, no plans were submitted and that it is unlawful construction.

They now said that we are compelled to demolish the extension. What options do we have, how can we prevent this from happening now and what are our prospects in the future?

A nswer

from Bruno Simao:

You need to seek immediate legal advice. No person shall without the prior approval in writing of the local authority in question, erect any building in respect of which plans and specifications are to be drawn and submitted in terms of this Act.” (National Building Regulations and Building Standards Act).

Firstly, local authority planning permission is a legal requirement before any building works, renovations or extensions can take place. You will need to check with your local municipality what its particular requirements are, and what “minor” works are exempt from this requirement in your area. Without municipal permission, you have an unlawful structure on your hands – a recipe for disaster. The problem for you as the buyer is that, once the transfer is through you are now the registered owner, it is therefore up to you as buyer that the municipality will look to obtain any outstanding building authorities and plans, to pay any penalties for non-compliance, and possibly even to demolish the unlawful structures.

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REI MAGAZINE AUGUST

The seller isn’t obliged to supply proof (and plans) to you, unless…

Your risk as a buyer is that the seller is only obliged to supply proof of planning permission and approved plans to you if that is specifically required by the sale agreement. Ideally you must always ask for plans before you put your offer in, otherwise insist on a clear clause in the agreement requiring the seller to produce the plans before transfer. It’s the only way to avoid the risk of having to rectify unlawful structures.

Make sure it is clear that the seller (not you) must get and produce the plans

A 2023 High Court decision addressed a claim by buyers who had at the negotiation stage noticed newly erected buildings in respect of which they were advised that building plans were at the ‘approval stage’ with the municipality. Accordingly, the sale agreement provided that the sale was subject to approval of building plans by the municipality. What the deed of sale did not specify was who had to get the plan approval – was it the buyer, or the seller? The Court ultimately declared the seller responsible for obtaining the plans on the basis that by default only a landowner can apply for approval and plans, but that victory for the buyer came only after a hard-fought court battle. You can avoid all those delays, cost and disputes with an upfront clause clearly putting the obligation on the seller.

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When you have the plans, check them against all structures

Plans in hand, check that all the buildings and structures actually on the property tie in with the municipal approvals and plans. It’s not uncommon to find plans are outdated or inaccurate. Sometimes regulations have changed, sometimes owners chance their luck or have just overlooked the need to keep plans updated as renovations and extensions take place. And whilst the municipality may accept “minor” deviations from plans, you should be sure of what is acceptable and what isn’t before you take transfer. First prize here of course is updated “as-built” plans showing the construction as it exists after completion – you’ll probably need them anyway if you do renovations down the line.

Sellers – why should you have the plans ready to offer them to the buyer?

The other side of the coin of course is that as a seller, even though you aren’t legally required to do so, it makes a lot of sense to have on hand copies of all building approvals and plans before you sell:

•As a sales tactic you can now reassure prospective buyers that all structures are lawfully constructed.

•You will avoid delay if the bank granting the buyer a mortgage bond decides it wants copies of plans as part of its approval process. That’s exactly what happened in the High Court case discussed above, delaying transfer substantially.

•You will also be reassuring yourself that all necessary approvals and plans were in fact obtained at the time of construction. If it turns out for example that you or a previous owner inadvertently dropped the ball in that regard, a disaffected buyer will try to pin all the blame on you. You might even be accused of fraudulently concealing a lack of plans – in which event the standard “voetstoots” (“as is”) clause won’t protect you. There’s no risk of any of that if you have the actual plans on hand from the start.

•In any event the “Mandatory Disclosure Form” that you must attach to the sale agreement specifically requires you to certify that the necessary consents, permissions and permits were obtained for any additions/improvements etc. Attaching the actual approvals and plans is the best way to cover you in the event of any dispute down the line.

Got Questions? We’ve got Answers! Send your queries to info@rei.co.za or drop them on our vibrant community on Facebook or LinkedIn.

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REI MAGAZINE AUGUST

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rei.co.za

JUNE 2024

GUIDE TO MAKE MILLIONS IN PROPERTY

Investor of the Year Darren Francis tells us how

SA’S AFFORDABLE PROPERTY MARKET

Addressing the potential & complexities

COMMERCIAL RENTAL PROPERTIES

Boubker Benjelloun Boubker Benjelloun

What modern tenants seek?

BOUBKER BENJELLOUN

The rising star of global architecture at the service of humanity

AUG 24

JULY 24

rei.co.za

MAY 2024

DECODING THE METAVERSE

Robert Kiyosaki's Top 5 Strategies Exposed

RENT OR BUY

MAY 24

APRIL 2024

MARCH 2024

Young Adults embrace extended Rental Trend

MASTERING SA EVICTION LAWS

SOLAR PANEL BUYERS GUIDE

EXPLORING LUXURY REAL ESTATE

AIRBNB STRATEGIES REVEALED

TUHF EMPOWERS URBAN ENTREPRENEURS

Delving into the Art of Transactions

Diversify your Wealth: Richard Haller shares strategies for offshore real estate & investment migration

FEBRUARY 2024

DECEMBER 2023/JANUARY 2024

The rise of Sectional Title ownership

MASTERING LEGAL EVICTIONS

Step-by-Step Guide to serve notices effectively

GAUTENG PARTNERSHIP FUND

CEO Lindiwe Kwele: Advancing Equality in Gauteng's Human Settlements

FEB 24

REI MAGAZINE AUGUST

UNLOCKING PROPERTY HOT SPOTS

Prime Investment Opportunities in a stable interest rate landscape

CAPITALISE ON THE HYBRID WORKING BOOM

Property Owners Leverage Rapid Growth

STRATEGIC PROPERTY MASTERY

Navigating risks & reaping rewards

Data driven insights for short-term rentals

Finance Support for Affordable Housing

MARCH 24

rei.co.za

Optimising property value before sale

5 Ways for Affordable Solar Solutions

SABLE INTERNATIONAL

rei.co.za

HOSPITALITY INVESTMENTS

GENERATION RENT

Your Guide to maximizing property profitability

APRIL 24

PROFITABLE ENHANCEMENTS

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rei.co.za

Navigate the process of removing nightmare tenants

Unveiling the Options & Pros & Cons

Exploring Cyprus offshore: Property Investment, Residency Opportunities & Living options with Jenny Ellinas

rei.co.za

EFFORTLESS PROPERTY RETURNS

Play or pass?

REVEALING REAL ESTATE WEALTH

CYPRIOT REALTY

JUNE 24

RIVERLANDS

Unveiling Cape Town's New Urban Oasis: David Cohen unpacks the upside of this visionary new growth node

DEC 23/JAN 24

MAGAZINE ARCHIVES

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15

WOMAN OF THE MONTH

Khali Masooane

From Sharpeville to Property Investment Leader

By Neale Petersen

Khali Masooane’s journey from Sharpeville, a town steeped in South Africa’s volatile history, to becoming the Head of Investor of the Year for the SA Property Investors Network (SAPIN) is a testament to resilience and transformation.

Born and raised in Sharpeville, Masooane’s early life was marked by shyness and a tendency to blend into the background. Despite this, her innate brightness made her a target for bullying throughout primary and high school. It wasn’t until grade 10 that she discovered art and acting, which became her outlets for selfexpression and standing up to these bullies. This pivotal experience instilled in her a resolve to never again hide or remain silent.

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WOMAN OF THE MONTH

Masooane’s educational journey began at a Catholic primary school before transferring to Park Ridge Primary and then Sun Crest High School. Her passion for learning continued at Boston Business College, where he pursued a marketing qualification. Financial constraints forced her to leave her studies, leading her to start working to support herself and her family. This period shaped her philosophy of perseverance and dedication, which she carried into every job she undertook.

Her professional journey began as a waitress, a role that gradually evolved into a managerial position. Despite her success, Masooane felt unfulfilled and made a bold decision to move to Cape Town alone, seeking new opportunities. In Cape Town, she transitioned into the communication sector and later found a role in the IT department at Amazon. However, a life-changing moment came when a friend introduced her to Robert Kiyosaki’s “Rich Dad, Poor Dad.” The book resonated deeply with Masooane, inspiring her to shift her focus to property investment.

Masooane began attending property events and connected with Andrew Walker in Cape Town, solidifying her interest in real estate. Through mentorship and education, she acquired the skills and knowledge necessary to excel in the property sector. This journey not only enhanced her expertise but also helped her discover her voice as a speaker. Her commitment to transparency and education in property investment led her to SAPIN, where she now plays a crucial role in educating and empowering others.

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At SAPIN, Masooane helps provide comprehensive education and support for property investors. The network offers a blend of theoretical knowledge and practical insights, featuring accredited courses, networking opportunities, and mentorship. SAPIN’s mission is to foster a thriving community of informed investors, and Masooane’s leadership is instrumental in advancing this vision. The organisation’s focus on empowering youth and women, along with its prestigious Investor of the Year Awards, highlights its commitment to excellence and growth within the property market.

Masooane’s entry into the property sector was driven by a desire to help others, educate them, and create wealth for herself. His journey to success was marked by significant milestones and challenges, including the profound impact of her father’s passing due to COVID-19. This personal loss motivated her to take on new responsibilities and honour her father’s legacy by surrounding herself with mentors and experts.

Among her career highlights, co-hosting the Investor of the Year Awards stands out as a major achievement. Looking ahead, she is excited about co-hosting the Real Estate Investment Summit (REIS), one of the country’s largest real estate events.

Masooane’s approach to evaluating deals emphasises three key factors: thorough research, education, and strategic planning. Her investments in real estate have reinforced the importance of continuous learning and aligning with like-minded individuals. The best investment she has made is in herself, equipping herself with the tools to help others achieve their potential.

Masooane admires figures like Andrew Walker and Carolina A Wanga for their impactful work and considers them valuable sources of inspiration. Her vision for her legacy is centred on making a meaningful impact on others’ lives, empowering them to achieve their dreams through education and support. She aspires to be remembered for her contribution to uplifting others and facilitating their growth, a goal deeply rooted in her commitment to human connection and empowerment.

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MASTER INVESTOR

Andrew Walker

From humble beginnings to Property Investment Success – A journey of lessons and triumphs

By Neale Petersen

Andrew Walker’s journey from a young entrepreneur in Edenvale, Johannesburg, to a prominent figure in property investment is a testament to his perseverance and vision.

Growing up in a modest environment, Walker’s early forays into work were diverse—from delivering newspapers and working in a soap shop to assisting as a butcher and trolley boy at Eckards Garden Centre. His entrepreneurial spirit was evident from a young age, driven by a strong desire to earn and succeed.

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MASTER INVESTOR

During his high school years, Walker threw a memorable party that famously ended in his parents’ house being wrecked. This event marked a turning point, leading him to pursue sound engineering—a passion he nurtured for a decade. He worked as a DJ and sound engineer, contributing to 94.7 radio station, building sound studios for SABC, and mic’ing up bands at Roxy’s club in Johannesburg.

In 2002, Walker’s entry into property investment began with a two-bedroom holiday let on the South Coast of Durban. This property tripled in value by 2005, yielding substantial profits and igniting his passion for real estate. The pivotal moment in Walker’s property career came in 2005 when he moved to London with his wife, Simone. On a Tube ride, they saw an advert for a Robert Kiyosaki event, which inspired them to dive into property education.

They sought mentorship from Mathew Sneddon and began building a network across the UK. Their focus on Grimsby, a promising investment area, led them to engage in buy-to-lets, multi-lets, flipping, and lease options. They settled in Barrow on Humber, where they built a profitable portfolio and established Letsand, a UK letting agency still operational today, assisting international investors with property sourcing, refurbishments, and management.

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ANDREW WALKER PROFILE

Company: SA Property Investors Network

Position: Founder and Director

Qualifications: Diploma in Sound Engineering / Entrepreneurship

Family: Husband to Simone; Father to Logan (13) and Skyla (11)

Hobbies: Rugby, braaiing, and spending quality time with family and friends. In 2022, I founded the Junior Panthers Rugby Club in Edenvale for my son, Logan. Since then, I have dedicated my time to supporting and mentoring the kids in our local community through this initiative.

Best Book you read lately: The Jersey – Peter Bills

Personal Motto: Work hard play hard

Returning to South Africa in 2013, Walker and his wife saw a gap for a similar networking and educational platform. This realization led to the founding of the SA Property Investors Network (SAPIN), dedicated to creating a community for investors to learn, connect, and thrive.

SAPIN combines theoretical education with practical insights, offering accredited courses, networking opportunities, and ongoing support. The network is enriched by divisions like SAPIN Youth and SAPIN Women, aimed at empowering young and female investors.

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MASTER INVESTOR

Walker’s early fascination with Monopoly evolved into a real-world career in property investment. The success of his first property deal, coupled with insights from Robert Kiyosaki’s “Rich Dad Poor Dad,” fuelled his ambition.

Despite facing setbacks, such as a disappointing land deal in South Broom, Walker learned the importance of due diligence and self-education. His first UK deal, a BRRR (Buy, Renovate, Rent, Refinance) project on James Street in Grimsby, solidified his approach and set the stage for future successes.

The 2008 financial crash tested Walker’s resilience but also provided valuable lessons in recognizing opportunities amidst challenges. He views setbacks as learning experiences and emphasizes the importance of strategic partnerships in business. His motto, “In business, date before you marry,” reflects his belief in thorough evaluation before committing to business relationships.

Q &A

WITH ANDREW

1. What are the most important factors when evaluating a deal?

•Running the numbers •Area research •Exit strategies •Gut feeling

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2. Your real estate investment journey, you have made and the most important lessons you learnt from the experience in your capacity as an investor?

My property investment journey began with Robert Kiyosaki’s training in London in 2005, where I learned the importance of investing for cash flow. This principle remains central to my investment strategy today. Here are some key insights and lessons I’ve gained along the way:

Start Small: Begin with smaller deals to build your confidence and experience. As you gain knowledge and success, gradually move on to larger investments.

Build Your Power Team: Surround yourself with a reliable and knowledgeable team of professionals, including real estate agents, contractors, property managers, and legal advisors. A strong team is crucial for successful investments.

Scale Up Gradually: With each subsequent deal, aim for slightly larger investments. This gradual scaling helps mitigate risks while allowing for growth.

Choose the Right Entity: Ensure that you are purchasing property in the appropriate legal entity to maximize tax benefits and protect your assets.

Prepare for Challenges: Property investment is not always smooth sailing. Be prepared for unexpected challenges and budget not only for day-to-day maintenance but also for future expenses, such as a mini refurbishment five years down the line.

Cash Flow is King: Always prioritize cash flow over potential appreciation. A positive cash flow ensures that your investment remains sustainable and profitable in the long term.

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MASTER INVESTOR

3. What is the best investment you ever made whether in an asset, yourself or anything else? What were the key results?

This might seem cheesy but the mentorship I bought in 2005, the continued coaching from Mark Dalton and now Robin Booth is by far the best investment, the outcome is I know manage a portfolio in the UK , a UK letting agency , South African properties and SAPIN!

4. What lasting legacy would you like to leave in the world?

My story, I want my story to inspire thousands of South Africans that if you just put your mind to it you can achieve anything.

Walker’s approach to setbacks and strategic partnerships has been instrumental in his success. His journey highlights the importance of persistence, continuous learning, and building strong, strategic business relationships. Through SAPIN, Walker continues to contribute to the property investment community, sharing his knowledge and experience to empower others in the industry.

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REI MAGAZINE AUGUST

Join Neale Petersen

Founder & Editor-at-Large of REI, as he hosts exclusive weekly webinars featuring top real estate thought leaders covering the hottest topics shaping the property market today.

EVERY THURSDAY 12:00 - 13:00

See UPCOMING EVENTS

www.rei.co.za 27

COMPANY PROFILE

SAPIN:

Empowering investors through Expert Mentoring, comprehensive education, and a National Network for Unmatched Property Success

SA Property Investors Network (SAPIN) founded by Andrew Walker in 2013 stands out in the property investment landscape due to their comprehensive approach to education and community building. Unlike other platforms, SAPIN combines expertly crafted online courses with engaging in-person workshops, ensuring that investors receive a well-rounded and practical learning experience.

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COMPANY PROFILE

SAPIN’s extensive national network of like-minded investors creates an unparalleled environment for networking and collaboration, fostering growth and success. They are dedicated to empowering their members with the latest industry insights, hands-on support, and a strong, supportive community. With SAPIN, you are not just learning about property investment; you are becoming part of a dynamic network committed to your success.

SAPIN’s offerings include:

Educational Programs: They provide accredited property investment education through online courses and in-person workshops, tailored to all experience levels and recognized by Services Seta. Networking Opportunities: Their events and online platform connect investors nationwide, facilitating valuable relationships and collaborations.

Support Services: We offer continuous support through mentorship, resources, and expert advice, helping investors navigate challenges and achieve their goals.

Empowering Youth and Women: Through our SAPIN Youth and SAPIN Women divisions, we are dedicated to empowering the next generation of property investors and promoting women’s involvement in the industry. We offer specialized programs, events, and support to ensure their success.

Investor of the Year Awards: We host the most prestigious property event of the year, celebrating excellence in the property market. They are fully committed to supporting first-time buyers, intermediate to advanced investors in empowering youth and women in property.

SAPIN’s vibrant community of like-minded investors spans the nation, providing unparalleled opportunities for networking, collaboration, and growth.

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INVESTING

Three Strategies to achieve Financial Freedom and create a second income

By Jaco Grobbelaar

There is not a day that goes by that I don’t come across someone stuck in the relentless rat race, and my heart goes out to them. People work from morning to night, often in a career they don’t enjoy, only for money. Surely, there is more to life than that?

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INVESTING

Still, I understand. With the rising costs of living, high unemployment rate, uncertain economic climate, etc. many people feel like they have to stay put in the same job. However, it is possible to break free from this cycle and experience financial freedom. My question to you is, what are you doing to get out of the rat race? Or have you resigned to keep running in circles forever?

What the experts say about escaping the rat race

According to Warren Buffet, we should never depend on a single income. His view is that we need to invest to create a second source of income. He also famously said, “If you don’t find a way to make money while you sleep, you will work until you die.” I don’t know about you, but I’d rather try the first way.

“The trouble with the rat race is that even if you win, you’re still a rat.” - Lily Tomlin

Robert Kiyosaki is another famous investor who says that the poor trade time for money, whereas the rich trade money for time. I’ve said this before, but I want to reiterate it: Time is the most precious commodity you will ever have. Therefore, you need to nurture it, as well as your health, more than anything else! You want to be able to own your time and work because you enjoy working, not because you have to or because you need a salary at the end of the month.

Creating a second source of income

If we want to succeed, we have to intentionally create and build pathways that can bring us secondary sources of income. Preferably these should be more passive because passive income is a key to financial freedom. But as I’m sure you know, this is not going to happen by itself, and it is not going to happen easily. You are going to have to be very intentional about it and build towards it every day.

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Do a quick online search and you will find thousands (if not millions) of ways to create a secondary income, including selling services or products online, freelancing, affiliate marketing, etc. You can also invest in various asset classes like shares, cryptocurrencies, foreign exchange, and so on.

Investors often build a diversified portfolio by combining various asset classes based on their financial goals, risk tolerance, and investment horizon. Diversification not only helps spread risk but also reduces the impact of poor performance in any single asset class. While there are many different investment options, for me, property is by far the best asset class to create consistent and sustainable cash flow. It is also more passive in nature and can replace your primary source of income.

The power of property investment

Although one usually invests in property for the long term, you can benefit from your property portfolio in the short term. Most people are aware of rental income, but you benefit from capital growth as well! The capital growth can be accessed by selling the property, but even better, you can access it by refinancing. Now, combine that with using as little of your own money as possible, i.e., using the bank’s money, and you’ve got a lucrative way to get out of the rat race.

One of the nicest things about consulting with clients about their property investments daily is seeing how more mature ladies and gents, who have been investing in property for some time, have created passive income for themselves. They don’t have to work anymore, and they can live off the proceeds from their rental income. If that’s not a win, I don’t know what is!

Their secret? They started young and they kept buying properties. They didn’t sell, and they made sure they protected the cash flow by either paying off the properties as quickly as they could or by having sufficient cash reserves to protect them in volatile, unpredictable times.

3

Strategies for your journey to financial freedom

1. Manage risk effectively:

Mitigate investment risks by making informed decisions and continually educating yourself.

2. Manage your time:

Effectively balance your responsibilities to maximise productivity and create more time for investments.

3. Have a long-term vision:

Understand that financial freedom is a marathon, remain patient, and stay committed to your goals.

The journey from rat to fat cat isn’t an overnight one. I started investing in property to create a secondary source of income, and that was my way to get out of the rat race. It happened slowly but surely, and I was very intentional. Today, I can proudly say I am no longer a rat, but well on my way to becoming a fat cat! Are you ready to do the same?

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INVESTING

Unlocking Profits:

Exploring 6 Key Airbnb advantages in South Africa – PART ONE

By Robin Booth

As a property investor with over two decades of experience, I’ve continually sought strategies that deliver high yields and foster significant portfolio growth.

My journey began with exploring various investment models, from traditional buy-to-let and student housing to multi-lets, back-to-back flips, and even developments. While each approach had its advantages, none have matched the remarkable returns I’ve achieved

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INVESTING

Spanning from Cape Town to Johannesburg, Airbnb has proven to be a uniquely lucrative opportunity, offering unparalleled potential for profitability across South Africa

6

key advantages to investing into Airbnb in South Africa

1. The Allure of South Africa

South Africa’s charm is undeniable. From the iconic Table Mountain to the vibrant city life of Johannesburg and the natural beauty of places like Kruger National Park, it’s no wonder that the country draws millions of tourists each year. This constant influx of visitors makes it an ideal location for short-term rentals. According to recent reports, domestic travel on Airbnb has

surged, with bookings in the first half of this year up approximately 65% compared to the same time in 2019​. But you would be mistaken if you think Airbnb is just about tourism. In fact, many businesses require people to travel for meetings and events, making Airbnb an ideal solution for easy and accessible accommodation.

2. Superior Returns with Airbnb

In my experience, Airbnb properties across South Africa significantly outpace traditional rental models in terms of returns. For instance, properties in sought-after areas often achieve higher occupancy rates and command premium nightly rates. Even during the quieter months, the right property with a compelling offer can

still perform well. Data shows that while the average occupancy for traditional rentals might linger around 35-50%, well-managed Airbnb properties can see occupancy rates of 65-85%. In my listings, we have learnt a few more tricks and strategies and our occupancy rates are even higher, achieving 80-95% occupancy.

3. Unique Experiences Drive Success

The success of an Airbnb investment hinges on more than just location; it’s about offering a unique and memorable experience. Guests are no longer satisfied with just a place to sleep—they seek homes that provide a distinct local flavour. Properties that stand out with remarkable interior design, modern amenities, and

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thoughtful touches tend to perform better. For example, homes with stunning views, luxury furnishings, and added features like pools or hot tubs often achieve higher occupancy and rates. It’s about creating a space where guests can immerse themselves in the South African lifestyle.

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4. Economic and Community Impact

Airbnb’s impact on South Africa extends beyond individual profits. In 2022, Airbnb contributed significantly to the local economy and supported thousands of jobs. The platform boosts the local economy and supports sustainable tourism by encouraging travellers to explore neighbourhoods beyond the typical tourist hotspots. Domestic travellers, in particular, have become a significant part of this growth, accounting for a large portion of total nights booked on the platform.

5. Mitigating Risks and Maximizing Returns

While the potential for high returns is evident, investing in Airbnb does come with challenges. Seasonality and market saturation are factors to consider. Properties need to be managed effectively to maintain high occupancy rates but the upside of this is that a significant amount of this can be automated. Selfcheck-ins, automated messaging and great

online resources help with effective team communication. Investing in professional property management can alleviate these challenges, ensuring that the property remains attractive to guests yearround. Our experience has shown that with the right strategies, Airbnb properties can outperform traditional rentals significantly, providing a lucrative investment opportunity​.

6. Harnessing Expertise for Success

The great thing about this is the ability to scale an Airbnb portfolio. By using the rent-to-rent strategy (where you rent a property from a landlord and then with their permission, you sublet it on Airbnb) this form of rental arbitrage means you can benefit from the high income without having to own the property in the first place. This means that if you rent an already furnished property, you may only need to be put down one month’s rental deposit and the first months rent and you are set to go.

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Airbnb delivers on many levels

Airbnb stands out as a superior investment model in South Africa, delivering higher returns compared to traditional rental models. The country’s global appeal, coupled with the ability to offer unique guest experiences, makes it a lucrative option for savvy investors.

By focusing on exceptional design and management, investors can tap into the thriving short-term rental market and enjoy substantial financial rewards. For those looking to maximize their Airbnb success, following expert advice and proven strategies can make all the difference.

I have seen these strategies work with hundreds of investors across South Africa. Their success stories illustrate that with the right guidance, anyone can turn their property into a profitable Airbnb venture.

About the author

Robin Booth is an award winning entrepreneur and the 2018 South African Investor of the Year winner. His online Airbnb courses have helped thousands of investors get started, and then scale their Airbnb portfolio. He also works as a professional Business and Property coach, with his clients achieving growth exceeding their goals.

CLICK HERE FOR MORE INFO

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T WO P OW E R F U L G U I D E S TO FINANCIAL FREEDOM T H R O U G H P R O P E R T Y I N V E ST I N G IN SOUTH AFRICA BY JACO G R O B B E L AA R

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RESIDENTIAL

Addressing South Africa’s over 2 million housing shortfall:

Lessons from Canada

By Jason Lee

South Africa has a housing crisis. The South African government estimates a current national shortfall of over 2.1 million homes for about 12.5 million people. The only way this crisis can be resolved is for the government to incentivise private sector real estate developers and remove the red tape that hinders them.

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To do this, South Africa should look to other countries such as Canada that are also facing a housing crisis due to explosive immigration. Currently, annual immigration in Canada amounts to almost 500,000 new immigrants, one of the highest rates per population of any country in the world. All these new arrivals have put enormous pressure on the housing market.

To solve the housing crises, the Canadian government has introduced two groundbreaking reforms. The first, is to permit several provinces and cities to make significant changes to allow more multiunit housing on single family lots. In the province of British Columbia, for example, all municipalities with populations of over 5,000 people, are now required to rezone all single family lots for the development of 3 to 6 multi plex units depending on the size of the lot and or its proximity to transit. This means that every standard residential lot is now rezoned for multi plex development without going through the headache of a rezoning application that is both costly and very time consuming.

This reform makes a lot of sense for a few reasons. Firstly, single family homes have become more and more unaffordable for most middle-income families. They are also dwindling in popularity given that young families no longer hanker after big gardens for their kids to play in. Since the advent of the smart phone, kids spend more time indoors on their screens than playing outside so large gardens are becoming increasingly obsolete. Secondly, the multiplex zoning gives property owners the ability to build units on their existing land for extended family members. This is a perfect scenario for parents who want to downsize and create living space for their children or even their grandchildren. Thirdly, and most importantly, to tackle the housing crises one dwelling now becomes 3 or 4 or 6 so the days of large lots housing 4 to 6 people are now lots that can house 16 to 24 people or more.

The second groundbreaking reform is to rezone all land within 800m of what is known as Transit- Oriented Development (TOD) areas in provinces like British Columbia. TOD areas will feature highdensity, mixed-use developments.

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The goal of TOD areas is to create compact, livable communities near transit hubs such as train stations and bus exchanges. Local governments are required to allow minimum density requirements which vary based on the type of community and proximity to transit stations.

This approach aims to increase housing supply while promoting sustainable, transit-oriented lifestyles. The specific housing types may vary depending on local context and market demands, but the overall trend is towards higher-density residential options in these areas. In British Columbia, the new legislation has established different density and height allowances within an 800m radius of rapid transit stations.

Breakdown of density and height allowances that is permitted:

1.Within 0-200 metres of the station: Minimum 20 storeys in height Minimum Floor Area Ratio (FAR) of 5.0

2.Within 201-400 metres of the station: Minimum 12 storeys in height Minimum FAR of 4.0

3.Within 401-800 metres of the station: Minimum 8 storeys in height Minimum FAR of 3.0

For bus exchanges, the TOD area extends to a 400-meter radius with slightly different requirements:

1.Within 0-200 metres: Minimum 10 storeys in height Minimum FAR of 3.5

2.Within 201-400 metres: Minimum 6 storeys in height Minimum FAR of 2.5

It’s important to note that these are minimum requirements, and municipalities can allow for greater densities and heights in these areas.

Additionally, the legislation eliminates minimum vehicle parking requirements for new residential developments within these TOD areas to encourage transit use and reduce project costs. Most developers will tell you that restrictive parking requirements are the death knell of many projects so by removing this obstacle developers can achieve higher density with lower costs.

The key to the above is that developers now have certainty as to what can be developed on a site that meets the above criteria. They can also move quickly as the lengthy process of rezoning and looking for variances particularly pertaining to parking has been eliminated.

Besides just creating more housing supply the increase in supply will also help to stabilise the cost of housing in traditionally hot housing markets. The only way to stabilise the cost of housing is to create a healthier ratio of supply vs demand and I believe that reforms such as the above will go way further in achieving that than any other affordable housing reforms currently on offer.

Jason Lee is a property investor, developer, and author now based in Vancouver, BC, Canada. He invests in multi-million rand property deals in South Africa and Canada. He is also a best-selling author of 4 Property Investment books in South Africa.

BUY JASON’S PROPERTY INVESTMENT BOOKS

•Making money out of Property in South Africa •Fast forward your retirement through property •Retire rich through property •10 Simple steps to Property Wealth

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Discovering Craft Homes

Craft Homes, a name synonymous with quality and excellence in property development, has been shaping the South African residential landscape since 1993. With over three decades of expertise, Craft Homes offers a diverse range of properties designed to cater to the needs of investors and homeowners alike.

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PARTNER CONTENT

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RESIDENTIAL

Our portfolio includes modern bachelor apartments, luxurious family-sized homes, and everything in between. Spanning key locations such as Sandton, Broadacres, Kyalami, Wilgeheuwel and Pretoria East, our developments are strategically situated to offer convenience and exceptional value.

Craft Homes’ Diverse Offerings: A Commitment to Quality

Craft Homes has built its reputation on a commitment to creating homes that blend style, functionality, and durability. Whether you’re seeking a contemporary bachelor pad or a spacious family residence, our developments are crafted with care and precision. Our goal is to ensure that each property not only meets but exceeds your expectations, providing lasting value for the buyer and comfort for the owner or tenant.

As a privately owned company, we pride ourselves on our ability to adapt and thrive amidst changes in the residential market. Our properties are designed to stand the test of time, reflecting both aesthetic appeal and enduring quality. At Craft Homes, we understand that a home is more than just a structure; it’s a significant investment that deserves craftsmanship and thoughtful design.

Craft Homes Key Developments: Where Investment Meets Opportunity

1. The Terrace - Sandton Gate

Located just five minutes from Sandton, The Terrace offers a sophisticated urban living experience that combines the best of city and suburban lifestyles.

Our modern apartments range from 65m² to 255m² penthouses, each designed with premium finishes and top-notch amenities:

•2 Bedroom, 2 Bath Apartments: Starting at R2,099,000 for 75m². •3 Bedroom, 2.5 Bath Penthouse: Starting at R6,950,000 for 217m².

Amenities include: •2 Basement Parking Bays •Private Balconies •Views of the Braamfontein Spruit •Miele Electric Stove, Oven, and Extractor •Pre-paid Electricity Meters •Fibre Ready •Swimming Pool with Sundeck and Braai Facilities •24-Hour Security with Electric Fencing •Automatic License Plate Parking Access •Biometric & Tag Access •Pet Friendly with Body Corporate Approval

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The Terrace’s proximity to Sandton makes it an attractive option for both buy-to-let and shortterm rentals, promising substantial returns on investment. Like Olea View, The Terrace benefits from flexible rental options with a projected gross asset appreciation of at least 3% per annum*. Tenanted units are available to start your return on investment today.

*Ts and Cs apply.

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2. Olea View - Broadacres

Olea View Apartments offer an ideal blend of modern living and convenience, situated next to Fourways Life Hospital. This development caters to a range of needs with well-priced options:

2 Bed, 1 Bath Loft Apartments: Starting at R825,000 for 40m². Olea View is distinguished by its high-quality finishes and a suite of amenities designed for comfort and security, including: •Open Parking Bay •Solar Geysers •Dedicated Study/Work Nook •Pre-paid Electricity •Swimming Pool with braai facilities •Gatehouse & Offsite Security Monitoring •Electric fenced boundary wall

Investors will find flexible rental options appealing, from long-term leases with tenanted units available as well as short-term stays, enhancing rental income potential.

Additionally, Olea View has a capital growth potential with a projected gross asset appreciation of at least 3% per annum*. For those considering short-term rentals, we also offer furniture packages to maximise return on investment. *Ts and Cs apply CLICK HERE FOR

MORE INFO

Why Choose Craft Homes?

Choosing Craft Homes means investing in a legacy of craftsmanship and quality. Our developments are not just about building houses but creating homes that are crafted to enhance your lifestyle and investment portfolio. We invite you to explore our offerings further by visiting our website or contacting our dedicated sales team. Discover the Craft Homes difference and invest in a property that promises both immediate and long-term returns. Contact us: 08600 272 38

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3% gross asset appreciation value per annum*

Tenanted units available

Ts & Cs apply

08600 272 38

www.crafthomes.co.za

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Shaping township transformation through micro property development

By Nomfundo Molemohi

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PARTNER CONTENT

In recent years, transforming and revitalising townships has increasingly become a priority, as the high demand for affordable housing is coupled with a critical role that townships play in bolstering South Africa’s economic growth. Townships, therefore, are not only an important part of South Africa’s history, they also provide attractive investment opportunities to entrepreneurs.

Key to transforming the township economy, and thus changing the country’s socio-economic landscape, is micro property development. Entrepreneurs are empowered and supported as they create affordable, decent housing with access to essential amenities within township areas. They are also guided on how to be fully compliant with local laws.

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That has been our mission at uMaStandi for almost ten years and continues to this day. From its beginnings as a pilot project in Soweto, it has expanded in scope to enable entrepreneurs to create sustainable, rent-based businesses in Gauteng, KwaZulu Natal, Western Cape and the Eastern Cape. Our aim is to foster successful property entrepreneurship, along with doing our part to stimulate local economic growth.

While development can be immensely rewarding, it is not simple. For any property entrepreneur to become a successful developer, education is key. They need to have knowledge of basic finance principles, construction and property management, which is why we offer a property training course, run annually.

As with starting any business, property entrepreneurs must also have some equity. For any commercial investment property transactions, there is a loan portion and a portion that the investor provides in the form of cash. The days of receiving 100% loans are long gone. Instead, investors must provide a portion in unencumbered cash that constitutes as much of their own savings as possible to create equity in a project.

Like every client, so too is every project different. Those beginning down this path need to know that if their project is not viable and doesn’t check our boxes for being a solid investment, then we won’t finance it. Our overarching aim as a specialist property financier committed to inclusive growth and creating real development impact is to jointly grow and have a long-term relationship with the entrepreneurs we work with, while also addressing the urgent need for affordable housing.

uMaStandi client, Bulali Mdontsane’s property Singleton Heights.

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When we consider which projects to back, we look for potential. Questions that we consider in the loan approval process include what skills the developer brings to the table, who is helping them on the project, and whether they have an architect and builder onboard, as well as a structural engineer if they want to build a double story property. If they don’t have these in place, it doesn’t automatically disqualify them from receiving a loan, but we do then assist them to do a due diligence assessment so that their project is viable.

Additionally, it’s important to understand that where the property is located can pose significant challenges of town planning. Because of the historical origins of townships, the necessary infrastructure for clean water and sewerage, along with other essential municipal services, are frequently insufficient. This can slow down zoning and the approval of business plans, impeding developments – and it is therefore vital to work with the project team who can advise and support in navigating these complexities.

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Another imperative on the micro property development journey is compliance. Entrepreneurs cannot build or renovate a property without knowing the zoning of the site or ensuring that their plans are approved. It is also important that property entrepreneurs do their research and understand the challenges involved in a rental property business. That is why we strongly encourage all developers to network, participate in forums and learn from people who are already in the property business.

Along with this, property developers need to demonstrate ongoing accountability. We require those we fund to send us proof that they have paid their municipal bills and are up to date with SARS. Additionally, we inspect the property to ensure that it is being well managed, there isn’t water leaking into the street and no degradation of the property for example, because we want the value of the property to appreciate rather than depreciate.

uMaStandi client, Athi Matinise’s property Brahms Court.

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These are a few of the main parts of the journey towards shaping township transformation. Even as the road is long and there are several steps that need to be taken, at the end of the day the effort is well worth it. Provided that entrepreneurs are willing to be diligent in their approach, there is plenty of potential for success, as the demand for qualify affordable housing is growing.

By working with us, property developers can receive support to ensure they run successful businesses, impact communities where they invest and contribute to growing township economies.

About the author Nomfundo Molemohi, uMaStandi Portfolio Manager for the Western and Eastern Cape

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Five Unlocking Secrets to Optimise your Bond Finance on your property

By Bradd Bendall

Buying a property or even your home is a significant purchase, and one that will most likely require some form of financial assistance in the form of a bond, also known as a home loan. While this process is standard practice for most buyers who are unable to pay cash for their homes, there are some things about having a bond that may come as a surprise.

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5

things to use to unlock maximum benefit from your bond

1. Early and split repayments for lower interest

The earlier in the month you pay your bond, the less interest you will accumulate. This can help you shave years off your bond repayment over the loan repayment period. Another trick to save interest is to split your monthly bond instalment.

So, if your bond repayment is R8 000, arrange with the bank to deduct R4 000 on the last day of the month and the balance on the 15th. The full amount will be paid within a 30-day period, but the interest – which is calculated on a daily basis – will be reduced.

2. Recognition and Appreciation

If you can pay more than the required monthly instalment on your bond, you take years off your bond repayment period. Also, by paying off the balance sooner, you will reduce your interest over the loan repayment period.

On a R2 million bond, at a prime lending rate of 11.75%, a payment of R1 000 extra each month will save R564 586 in interest over the loan period, which will also be shortened by three years from 20 years to 205 months.

It may seem daunting at first, but with expert advice and some insider knowledge, you can navigate the property investment journey knowing that you are making an informed decision.

3. Benefits of keeping your bond open

Don’t cancel your bond once you have paid the full amount. If you keep the bond open, it will still be possible to access funds if needed. Any amount you pay over and above your instalment lies in an access facility and this can be accessed at a later stage.

Many homeowners use their primary residence to access funds so that they can buy their second property. There is no real benefit in cancelling your bond, unless you are selling the property, or you are absolutely sure that you will not be needing to access funds again. The bank will keep your account open unless instructed otherwise.

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4. Advantages of Joint Bond Ownership Contracts

Applying for a joint bond with a partner, family member or friend can make home ownership more accessible. Up to 12 people can apply for a joint bond. Irrespective of how many people share joint bond ownership on a property, make sure that there is a clear contract in place.

This agreement should include information about the sharing of the bond and access to the bond, each person’s financial contribution and who is responsible for managing the property.

5. Maximise savings using a Bond Originator

Working with a bond originator can mean a more favourable interest which will save you money on your monthly bond payments. By approaching multiple banks. At BetterBond for example we can negotiate an interest rate concession because the banks compete to offer the best deal based on your buyer risk profile.

Currently, the average interest rate concession when applying to four banks is 0.61%. This means that you could pay up to 0.61% less than the interest rate offered by the bank. On a R2 million bond, if the bank offers a prime lending rate of 11.75%, you would pay an interest rate of 10.91%, a saving of R1 153 a month.

Bradd Bendall, is the interim CEO of BetterBond.

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Property taxes demystified:

Essential Insights for Business and Residential Buyers

By Renier Kriek

Whether you’re buying property for business or to live in, you’re going to pay taxes at various stages of ownership. Owners - especially first-time buyers - need to be aware of their tax obligations and plan their property investments accordingly.

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Unfortunately, tax is often overlooked, so here’s an overview of what you need to know.

When you buy

When you buy a property, you will either pay VAT or transfer duty, but never both. VAT is charged when a VATregistered business sells a property, typically as a new residential development. Transfer duty, on the other hand, is levied when buying an existing residential property from its owner.

Importantly, transfer duty cannot usually be financed through a home loan, so you’ll have to come up with the money yourself. On higher priced properties, transfer duty can run into the hundreds of thousands. With a new property, VAT is included in the purchase price, so it is already covered by your loan. For first-time buyers, a new property can be much easier on their pockets.” It’s also important, when shopping for property, to keep

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in mind that new properties are cheaper at the same advertised price than their second-hand competitors, due to the impact of the transfer duty.

For as long as you own Once you take ownership of your property, you’ll immediately start paying municipal taxes. Whereas transfer duty and VAT are paid over to SARS, municipal taxes are used to fund city services, infrastructure and salaries. When planning to buy, you should consider how this tax will impact your monthly cash flow. We have, startlingly, had several clients who were surprised to learn that they will receive a monthly tax bill on their new home. The municipal tax is in addition to consumption charges for water and electricity and expenses like levies payable to the body corporate or homeowners’ association.

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Furthermore, if your children are over 18, they can be the primary applicant and include you in their application, which can be fully funded by the parents. This comprehensive approach makes the Greek Golden Visa a versatile and family-friendly option for global mobility.

When you sell

If you sell your property, you’ll pay capital gains tax (CGT). This is where things get a bit complicated. CGT is calculated on the difference between what you paid for a property and what you’re selling it for. Individuals are taxed on 40% of this profit at their marginal tax rate when it comes time to declare their annual income to SARS. However, if this is your primary residence (i.e. your home), the first R2 million of your profit is tax free.

There are a few catches though. For example, perhaps you initially rented out the property but then moved in to live there permanently before selling it. In that case, the R2 million allowance must be divided proportionately between the period you rented it out and the period you lived there. And you won’t be able to claim that first portion as tax free.

through an entity. However, the estate duty implication and the effect on the cost of administering your estate should also play into the consideration of the correct structure. Secondary properties, such as a holiday home, also don’t benefit, even if you do reside there occasionally.

Another instance is where you claimed a deduction for a part of the property used for business, such as a home office. You will also have to subtract this part from the allowance. Trusts and c ompanies, on the other hand, pay tax on 80% of their capital gains and don’t benefit from a primary residence allowance. This seems, on the face, to provide valuable incentives not to own your primary residence

When you die, you will have to pay estate duty on the value of your estate above R3.5 million, rendered unto SARS by your estate administrator. Any property disposed of at this time will attract CGT, and the same exclusion allowance is applied to your primary residence.

When you pass

If your estate cannot cover your debt or tax obligations, your property may be sold to raise the necessary cash.

There are several methods to protect your property against such a loss. You could take out extra life insurance to cover the tax liability. Or, you could sell your property to an estate planning vehicle, such as a trust or a company, at the earliest opportunity, in order to cap your eventual tax liability.

Although you’ll pay CGT on the profit from that sale, any future property value increases will be on the balance sheet of the entity, not your own, thereby escaping an otherwise increasing estate tax liability. And since trusts and companies don’t die, you can avoid CGT in perpetuity when you do - to the advantage of your beneficiaries, of course.

CLICK HERE FOR MORE INFO

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When you earn income

If you earn income from any source other than employment, you must pay provisional tax. This includes income from renting out your property. Provisional tax requires that you estimate your non-employment earnings for the year and pay tax on half of those earnings at the end of August, with the balance due at the end of February in that tax year. When you declare your total annual income, any provisional tax paid during the year is deducted from your assessed tax. Just estimating what you’ll earn in the coming year can be stressful and calls for the services of a professional tax advisor or accountant.

Starting out right

The sheer complexity of tax on property and the methods of managing that obligation cannot be covered fully in a single article. For this reason, it is essential to carefully plan your property purchases around both financing and tax. Especially for high value property investments, such as total property values exceeding R2 million, you definitely need to engage the services of estate management and tax planning professionals.

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BENEFITS OF USING A BOND ORIGINATOR

Buying a home is one of the most significant – and life-changing – investments you’ll ever make, which is why you need a home loan expert to guide you through the homebuying journey.

It is EASY as the client will have someone to guide them through the process and explain the complicated legal and financial aspects of their application.

It is TIME SAVING as the application is submitted electronically and simultaneously to all banks. This not only saves the client time from visiting each bank but also client will complete ONE APPLICATION FORM, as opposed to completing each bank form

An originator will assist the client with an overall assessment of their FINANCIAL SITUATION, CREDITWORTHINESS and AFFORDABILITY

It INCREASES THE LIKELIHOOD OF OBTAINING A HOMELOAN due to the originator’s knowledge of the different banks’ lending criteria

The multiple-quote model enables originators to NEGOTIATE INTEREST RATES with banks depending on what other banks have offered.

There is CONTROL and COORDINATION around the application process which also benefits theseller as this creates certainty that everything possible is done to assist on the transaction.

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Unveiling Key motivators fueling employee performance success

In the modern workplace, motivation is a key factor in driving employee engagement, productivity, and job satisfaction. While different individuals may be motivated by various factors, certain common themes emerge as top reasons why employees are motivated to work.

Let’s explore why they are essential for fostering a positive and productive work environment.

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1. Meaningful Work

Employees thrive when they feel that their work has a purpose and contributes to a greater cause or goal. Whether it’s making a difference in the lives of others, advancing a company’s mission, or addressing societal challenges, meaningful work provides employees with a sense of fulfillment and inspires them to excel in their roles. When individuals understand the impact of their efforts on a broader scale, they are more likely to be motivated and engaged in their work.

2. Recognition and Appreciation

Feeling valued and appreciated for their contributions is fundamental to employee morale and motivation. Recognition can come in various forms, including praise from managers, awards, or even simple gestures of appreciation. When employees receive acknowledgement for their hard work and achievements, it validates their efforts and encourages them to continue performing at their best. Recognition fosters a positive work culture where employees feel respected, valued, and motivated to contribute their best efforts.

3. Opportunities for Growth and Advancement

Employees are motivated when they see a clear path for career development and progression within the organisation. Providing opportunities for learning, skill development, and advancement not only enhances employee satisfaction but also ensures that they feel invested in their future with the company. When individuals have the chance to expand their knowledge, acquire new skills, and take on new challenges, they are more likely to remain engaged and committed to their work.

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4. Supportive Work Environment

A supportive work environment is essential for fostering collaboration, trust, and camaraderie among employees. When colleagues, managers, and leaders offer support, guidance, and encouragement, it creates a sense of belonging and motivates employees to work together towards common goals. Additionally, a supportive culture that values work-life balance and employee well-being contributes to overall job satisfaction and motivation. When employees feel supported and respected, they are more likely to be motivated and engaged in their work.

5. Fair Compensation and Benefits

Fair compensation and additional benefits are significant motivators for employees. Competitive salaries, performance-based bonuses, and attractive benefits packages demonstrate that the organisation values its employees’ contributions and is committed to their financial well-being. When individuals feel fairly compensated for their work, they are more likely to remain motivated and committed to achieving organisational goals. Fair compensation and benefits not only attract top talent but also retain employees and drive performance.

To discover how our affordable employee benefits can enhance both your workforce and your bottom line, explore Simply Staff Cover today.

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PROPERTY MANAGEMEN

Everything you need to know about Mandatory Disclosure Forms for rentals

By Jacqui Savage

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PROPERTY MANAGEMENT

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Mandatory disclosure of known defects has been a legal requirement for property sales for several years now. More recently, however (as of February 2022, to be exact) this requirement was extended to residential property rentals as well. Rental agents cannot market a rental property without a Mandatory Disclosure Document on file. However, there are still a lot of misconceptions around the purpose and protections afforded by these documents.

What is a Mandatory Disclosure Form (and what is it not)?

A Mandatory Disclosure Form is basically a summary of a rental property’s current condition, with a list of all known property defects. It’s compiled by the landlord, to the best of their knowledge. It must be completed and supplied to a rental agent at the time of signing the Mandate Agreement. While it’s important to understand what a Mandatory Disclosure Form is that it’s equally important to understand what it’s not. These documents are not a comprehensive lists of repairs to be rectified by the landlord. In fact, landlords are under no obligation whatsoever to remedy anything listed on the disclosure form unless this is specified – and agreed to – in writing.

Mandatory Disclosure Documents are not a substitute for a thorough ingoing inspection by prospective tenants

Landlords can only disclose defects that they are aware of. Given that very few landlords have personally lived in their rental properties, most rely on feedback from previous tenants or their rental agent about the property issues. Some Landlords do get outside contractors to do an independent Inspection when required.

It’s important to know that a Mandatory Disclosure Form is not a substitute for an ingoing inspection. Both ingoing and outgoing inspections are vital – and legally required – elements of the rentals process, and it’s in everyone’s best interests to attend them.

What should be included on a Mandatory Disclosure Form?

Guidelines state that Mandatory Disclosure Forms should include (but not be limited to) the following:

• Known Material Defects - Any known, material property defects, such as leaks, damp, or faults in electrical, plumbing, swimming pools, pumps, and/or air conditioning etc.

• Recent Repairs - Details on any repairs conducted in the last 12 months, or repairs that are still under guarantee/warranty.

• List of items not in working order - A full list of any items not in working order, including plug points, doors, windows, appliances, security systems etc.

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• List of items to be repaired - A list of items that will need to be repaired before occupation.

• Authority Bodies Contact Details - Any applicable details of Homeowners’ Associations (HOA’s) or Bodies Corporates (BC’s).

• Rates, Levies & Prepaid Electricity details - If the property is fitted with a prepaid electricity metre it must be noted if there are details of any outstanding municipal rates and levies which could be liable for penalties which can impact the cost of electricity if in default

• Mandatory Disclosure Forms must include signed Agreement -The signature of the landlord, tenant, and rental agent (where applicable) is necessary to record this.

What are the consequences of not having a Mandatory Disclosure Form?

If there is no signed Mandatory Disclosure Form as part of the lease agreement, the law will assume that no defects were disclosed to the tenant. Both landlords and their authorised rental agents could face serious fines if they are found to have neglected their disclosure obligations. The Rental Housing Tribunal takes tenant rights very seriously, and that includes the right to make fully informed rental decisions.

What are the benefits of Mandatory Disclosure?

The benefits of Mandatory Disclosure are fairly obvious for tenants – no more being blindsided by hidden property defects that could impact your ability to enjoy your rental property. Mandatory Disclosure Forms also offer benefits to landlords. Benefits that go well beyond merely staying on the right side of the law.

It’s actually really useful for landlords to have an up-to-date document on their property’s condition,It helps budget appropriately for repairs and maintenance, it makes it easier to substantiate rental escalation decisions, and it helps determine the property’s market value and overall investment performance.”

About the author

Jacqui Savage is the National Rentals Manager for the Rawson Property Group

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PROPERTY MANAGEMENT

Boost curb appeal and your property sales price with strategic upgrades and smart tech improvements

By REI Editorial By REI Editorial

Selling a property in South Africa can be challenging in the current buyer’s market, but there are strategies to expedite the process and secure a competitive price.

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Ensuring Compliance and Documentation

To prepare your property for sale and transfer, ensure it is compliant with all regulations and that major repairs are completed upfront. Prioritise essential installations like water, electricity, gas, and solar systems, and verify the functionality of amenities such as swimming pools and electric fences. Gather all necessary documents in advance, including approved plans for any renovations or alterations, to demonstrate compliance and legality.

Enhancing Property Appeal

Present your property in its best light by decluttering and minimizing personal items. Curb appeal is crucial for attracting buyers and securing firm offers. Refresh the property with a coat of paint, tidy the garden, and enhance the entrance with pot plants. Since buyers often explore properties online first, ensure your property is attractive both in price and appearance to make a strong first impression. There are expensive and inexpensive ways to get your price, here are the ones to focus on:

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High end tech upgrades to enhance your property sales price

1. Smart Lighting Systems

a. Smart Outdoor Lights: Automated lighting controlled via smartphone apps, offering different colours and intensities to highlight landscaping or architectural features.

b. Motion Sensor Lights: Lights that turn on when motion is detected, providing both security and aesthetic appeal

2. Smart Irrigation Systems

a. Weather-Responsive Sprinklers: Systems that adjust watering schedules based on weather conditions, ensuring lawns and gardens are well-maintained.

b. Smart Drip Irrigation: Precise watering for flower beds and specific plants, saving water and enhancing plant health.

3. Smart Security Cameras

a. Doorbell Cameras: Video doorbells with two-way communication and live video feeds to monitor visitors.

b. Perimeter Cameras: Outdoor cameras that provide surveillance around the property, integrated with security systems.

4. Smart Entry Systems

a. Smart Locks: Keyless entry systems that can be controlled via smartphone, adding convenience and a modern look.

b. Automated Gates: Remote-controlled gates for driveways that enhance security and curb appeal.

5. Smart Landscaping

a. Robotic Lawn Mowers: Automated lawn mowers that keep the lawn neatly trimmed without manual effort.

b. Garden Monitoring Systems: Sensors that monitor soil moisture, temperature, and light, providing alerts for optimal plant care.

6. Smart Outdoor Decor

a. LED Pathway Lights: Energy-efficient lights that illuminate walkways and enhance the aesthetic of the garden.

b.Smart Planters: Planters with built-in sensors that monitor soil conditions and plant health.

7. Smart Fencing and Barriers

a. Electric Fences: Invisible fencing for pets, keeping them safe within the property without physical barriers.

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8. Smart Privacy Screens

a. Motorized screens that can be adjusted for privacy and shade.

9. Automated Pool Systems

a. Smart Pool Lighting: LED lights that can change colours and be controlled remotely for an attractive pool area.

b. Pool Maintenance Robots: Automated cleaners that keep the pool clean and ready for use.

10. Smart Sound Systems

a. Outdoor Speakers: Weather-resistant speakers that can be controlled via smartphone for outdoor entertainment.

b. Integrated Sound Systems: Systems that blend into the landscaping for a seamless audio experience.

11. Integrated Lighting and Security

a. Systems that include lighting and security features for added curb appeal and protection.

Inexpensive curb appeal enhancements

12. Seasonal Updates

a. Seasonal Foliage: Update your curb appeal for each season. For example, ensure you have some evergreen foliage to balance any dormant plants if listing in the fall.

b.Ground Cover: Use mulch or pine straw to fill in garden beds and create separation or vistas around the yard.

c.Lawn Care: Weed-Free Grass: Ensure your grass is weed-free. A lush yard of dormant grass is more appealing than a patchy yard with weeds.

d.Irrigation Systems: Though they can be pricey, they provide convenience for homeowners wishing to reduce their environmental impact.

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13. Exterior Maintenance

a.Pressure Wash and Paint: Regularly pressure wash and paint the exterior of the house. It’s usually more cost-effective in the fall, but be mindful of temperatures that can affect the job’s progress.

b.Repair Damaged Siding or Wood: Regular maintenance to keep the exterior looking fresh and well-kept.

c.Termite Control: Ensure you have termite control, especially in Georgia, to reduce the likelihood of termite damage or wood rot.

d.Trimmed Bushes: Keep bushes trimmed and tidy.

e.Hanging Potted Plants or Seasonal Window Boxes: These can add a fresh pop to the exterior and enhance visual appeal.

Minimalistic strategic home updates that make a difference

14. Refresh Interior and Exterior Paint

a. A fresh coat of paint can make the home look new and well-maintained.

15. Strategic Bathroom and Kitchen Updates

a.Modernizing bathrooms and kitchens with new fixtures, countertops, and smart appliances can greatly increase home value.

b.Install smart thermostats, smart light switches, and smart outlets to make the home more energyefficient and appealing to eco-conscious buyers.

16. Ambient Lighting

a.Enhance the interior ambiance with smart lighting systems that offer adjustable brightness and colour settings.

If your budget is limited and you’re looking to get the most bang for your buck, avoid major structural changes like moving plumbing or breaking down walls.

Instead, focus on improvements that refresh the look and feel of your property. Simple upgrades can significantly enhance your property’s appeal and increase the sales price without incurring excessive costs.

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TECHNOLOGY

Artificial Intelligence:

“I’m not perfect.”

By Eric Nienaber

Artificial Intelligence (AI) is truly remarkable. If you’ve used OpenAI’s GPT-4o, Google Gemini, or Anthropic’s Claude, it’s hard not to be impressed by their responses to your queries.

Whether it’s summarising a document, creating an image, or assisting with coding, the capabilities seem almost magical. You might find yourself marvelling at the output, wondering how a machine could create something that once required a highly competent creative artist. The colour combinations, imagery, contrast, and light appear almost effortlessly within minutes.

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I’m not perfect

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However, the flip side of this experience is equally common. Many users have encountered the frustration of an AI failing to understand their requests. “This stupid machine can’t understand what I’m asking it to do!” you might exclaim. “How is this even relevant? That web reference doesn’t exist; it made it up!” Despite rephrasing your prompt multiple times, the answer remains unsatisfactory.

And then, there are the pleasantries. Please, thank you, my pleasure, I’m pleased I could assist you, etc. How many of you have found yourself having a conversation with the AI just for fun, thinking, “This machine is so human!” These awe-inspiring experiences, combined with media hype, impressive demos, and new model releases featuring groundbreaking capabilities, often lead to misconceptions about what AI truly is and what it can currently do.

It’s crucial to remember that AI, and the machines running its software, have never experienced hunger, pain, happiness, sadness, loss, exhaustion, fear, excitement, or any of the myriad things that make us human.

AI is a tool—a very powerful one—that can significantly contribute to our society and improve human life. It also has the potential to cause harm in various ways, but that’s a topic for another discussion.

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What is a Mandatory Disclosure Form (and what is it not)?

1. “AI thinks like humans”

While it may seem that way during interactions, AI lacks consciousness, self-awareness, and emotions. It is about algorithms and data. It does not think like humans.

2. “AI is quick and easy”

Developing AI is expensive and resource-intensive requiring significant hardware, software development, data, training and time. This will improve as time passes.

3. “AI knows better”

AI models are only as good as the algorithms and data used to train them. They inherently contain biases and gaps. Although the latest models provide impressive results, they are fallible and require human oversight.

?

AI is the most extraordinary technology I’ve witnessed in my lifetime, but it has limitations, as illustrated above. Admittedly, we are in the early days of AI development, and I have no doubt that we will see rapid advancements in this field. The power of these systems will continue to grow.

AI is here to stay, and it will change the world in ways we cannot yet imagine. As you embark on your journey in the AI space, enjoy and leverage what the tool can do but proceed with your eyes open and remember, it’s not perfect!

CLICK HERE

TO EXPLORE AI IN YOUR APPLICATIONS TODAY!

4. “AI is for automating tasks”

While AI can automate tasks, its potential extends far beyond that. It can augment human work, spark creativity, and expand knowledge.

5. “AI can understand things the way we do”

Despite our best efforts to provide context, AI cannot grasp the nuances of situations as humans do.

About the Author

Eric Nienaber is the co-Founder Ydangle Apps, the creators of IntelliWeave AI enabling you to embed AI in your applications.

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COMMERCIAL

Investing in Student Accommodation:

Opportunities abound in Gqeberha

and George’s growing market

By Mark Connett

Various studies have shown that there are more students than there are beds for them in South Africa. As a result, student housing has become an important growth industry. Developers have focused on markets like Cape Town and Stellenbosch, and while demand in traditional centres is certainly high, competition has become intense.

However, there are two towns that offer potential with significant demand for quality student accommodation: Gqeberha (previously Port Elizabeth) and George. Both are experiencing rapid student population growth, creating a pressing need for adequate student housing solutions.

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There are several institutions offering higher learning opportunities in Gqeberha. Among these, Nelson Mandela University (NMU) has seen a notable increase in student numbers. This growth reflects the university’s expanding academic offerings and its reputation as a leading institution in the Eastern Cape. NMU’s focus on creating a supportive and resource-rich environment for students, including establishing new transport systems and catering services, highlights the university’s proactive approach to managing this growth. These efforts ensure that students have access to essential services, thereby enhancing their overall university experience. The broader implications of these developments indicate a sustained increase in student numbers at NMU, which presents significant opportunities for investors in the student housing market in Gqeberha.

However, few know that NMU has a satellite campus in George, situated at the foot of the Outeniqua Mountains in the Southern Cape. This campus focuses on providing education

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that supports the green economy and sustainable development. It offers a range of programmes primarily in the fields of natural resource management, including forestry, agriculture, nature conservation and game reserve management. And George is on the brink of significant educational expansion, which will further drive demand for student housing. Plans are underway to establish a new university in the town, enhancing George’s position as an educational hub. Additionally, George College is planning to expand its campus to accommodate more students and offer a wider range of programs. These expansions will attract more students to the town, increasing the demand for student accommodation and presenting lucrative opportunities for investors The student housing market in Gqeberha and George presents a compelling opportunity. There have been significant changes in recent years, driven by evolving educational needs, policy adjustments and the ever-increasing student population.

Opportunities for Developers and Investors

According to a report by Nelson Mandela University (NMU), the shortage of on-campus housing has forced many students to seek off-campus accommodation, which often lacks proper regulation and security, comes at a high cost, and, often, is substandard. Many private landlords took advantage of the high demand, charging exorbitant rents for poorly maintained properties. This has led to significant dissatisfaction among students, who have raised concerns about their safety and the affordability of such accommodations.

The rapid increase in student numbers has exacerbated these issues. Recognising these challenges, local governments and educational institutions have implemented policies aimed at improving the student housing situation. In Gqeberha, the municipality has adopted a comprehensive student accommodation policy that outlines standards for safety, affordability and quality of housing

with the aim of regulating off-campus accommodation to ensure that students have access to decent living conditions.

The Western Cape Government has conducted extensive studies on the housing market in George to identify gaps and opportunities. These studies have informed policy decisions, investment strategies and zoning regulations aimed at boosting the supply of quality student housing. Local government has integrated student housing considerations into its broader urban development plans. These policies focus on creating safe, affordable, and well-maintained housing options that meet the specific needs of students and encourage the development of purpose-built student accommodation (PBSA) to address the growing demand.

The changes in policies and the persistent demand for student housing present lucrative opportunities for investors in Gqeberha and George.

Purpose-Built Student Accommodation (PBSA)

With new policies supporting such developments, investors can benefit from constructing dedicated student housing complexes that meet regulatory standards and cater specifically to students’ needs. These properties can offer amenities such as study areas, recreational facilities, and secure environments, making them attractive to students and their families.

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Public-Private Partnerships (PPP’s)

There is also potential for public-private partnerships (PPPs) in the student housing sector. Local governments and even educational institutions are increasingly open to collaborating with private investors to address the housing shortage. Such collaborations may even come with incentives that ensure long-term profitability.

Renovation and Upgrading of Existing Properties

Of course, the opportunity exists in renovating and upgrading existing properties to meet the new standards set by local policies. Many off-campus accommodations require significant improvements to comply with safety and quality regulations. By investing in the refurbishment of these properties, there is potential to enhance their value and appeal to the student market.

Expansion into Emerging Markets

While Gqeberha and George are the primary focus of this article, there are emerging markets within the broader region that also present opportunities. Smaller towns and cities with growing educational institutions are experiencing similar housing shortages. Investors can tap into these markets early, establishing a presence and benefiting from the rising demand for student accommodations.

Sustainable and Green Housing Solutions

With an increasing emphasis on sustainability, as educational institutions fill with GenZ, there is a growing market for eco-friendly student housing. Investors can differentiate their offerings by incorporating green building practices and energy-efficient designs. Such initiatives not only align with global sustainability trends but also appeal to environmentally conscious students and institutions.

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Technology Integration

Integrating technology into student housing can significantly enhance the living experience and attract tech-savvy students. Smart housing solutions, such as automated lighting, security systems, and high-speed internet, can set properties apart from traditional accommodations. Investors who embrace technological advancements can create innovative living spaces that cater to the modern student’s lifestyle.

The student housing market in Gqeberha and George is ripe with opportunities for investors. Savvy investors willing to venture beyond the more crowded property landscapes of traditional educational strongholds are likely to be well rewarded.

Mark Connett is the Broker owner of Just Property Port Elizabeth Commercial

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Sun, Sand, and Spreadsheets:

Africa’s Rise as the Ultimate Workcation’ destination for hybrid workers

By Gidgette Osborne

Forget the water cooler chats and crowded commutes. The rise of remote work has ushered in a new era of location independence, and Africa is rapidly becoming a top contender for the “workcation” crowd.

Workcations, where travellers combine work and leisure at their destinations to prolong holidays, have exploded in popularity since hybrid working became the popular working model for many. Thanks to the proliferation of hybrid working and cloud technology, employees can work from wherever they feel most productive. Recent research, polling 12,000 workers globally, has found that more than four in five (84%) hybrid workers have, or would consider, extending a holiday to work remotely from their chosen destination.

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New research from International Workplace Group, the world’s largest operator of flexible and hybrid workspace, has revealed the rising popularity of workcations among office workers, with three quarters (74%) of workers viewing a ‘work from anywhere policy’ as a significant factor when considering a new job. The same number (75%) said that the freedom of being able to work from anywhere boosts their job satisfaction.

This trend allows professionals to seamlessly blend business with pleasure, transforming their laptops from cubicle companions to beachside buddies. IWG’s unrivalled network coverage includes approximately 4,000 locations across more than 120 countries, and 83% of Fortune 500 companies are amongst their growing customer base.

Many African destinations recognise the workcation trend’s potential and are actively developing themselves as workcation hubs. This includes partnering with flexible office space specialists like IWG which includes the Regus, SPACES and HQ brands in Africa. ​ IWG provides workspaces with modern amenities, cutting edge technology and an all-inclusive working environment in popular workcation spots, enabling people to choose where they want to work. Some countries are now even offering visa options tailored for extended stays for those looking for a workcation.

Imagine working with the sound of waves lapping at your doorstep or gazing out at breathtaking sunsets from your balcony after a productive workday. Africa offers diverse workcation destinations, from luxurious beach resorts in Zanzibar to secluded eco-lodges nestled within national parks. Whether you seek the vibrant energy of Cape Town or the serenity of a secluded island getaway, Africa has a workcation setting to suit your preferences.

Workcations offer a win-win situation for both individuals and destinations. Professionals enjoy a refreshing change of scenery, leading to improved work-life balance and increased productivity. Destinations benefit from increased tourism revenue and longer visitor stays, injecting vibrancy into local communities through interaction with remote workers.

As remote work continues to grow, Africa is poised to become a leading workcation destination. The continent’s diverse landscapes, vibrant cultures, and increasing infrastructure offer the perfect blend of work and play for digital nomads and remote workers seeking a refreshing change. Africa can solidify its position as the ultimate work-leisure paradise by addressing internet access challenges and creating workcation-friendly environments.

Here are some examples of African hotspots currently attracting workcationers: South Africa: Cape Town boasts a vibrant workcation scene with various co-working spaces, cafes, and breathtaking scenery.

Morocco: Marrakesh has captivated travellers for centuries with its vibrant souks, stunning architecture, and rich cultural heritage. Now, thanks to a growing infrastructure to support remote work, it’s also gaining attention as a desirable workcation destination. It offers an enticing blend of tradition and modernity to hybrid workers looking to immerse themselves in a unique cultural experience.

Mauritius: This island paradise combines stunning beaches with reliable internet, making it ideal for those seeking a tropical workcation experience.

The ongoing shift in work culture has not only transformed professional attitudes but also broadened workers’ horizons when choosing travel destinations. Eighty per cent stated that the availability of these policies has prompted them to consider destinations they previously wouldn’t have.

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International Workplace Group Founder and CEO Mark Dixon said: “For an increasing number of workers, the days of long daily commutes are over now that hybrid working offers the opportunity to work wherever we are most productive. Thanks to cloud technology, that can be anywhere in the world, provided there’s a high-quality internet connection available.

So, it’s no wonder that more and more individuals are embracing the idea of combining work with travel, whether for a few days tacked on to the end of a vacation or a few months as a digital nomad.

This trend is set to accelerate further, and we will continue to see more companies embracing WFA policies to improve employees’ work-life balance and increase their attractiveness as employers.”

With brands including Regus, Spaces and HQ, International Workplace Group offers access to an unrivalled global network and the opportunity to work from anywhere worldwide, with a strong presence in the most sought-after destinations, from Barcelona to Brussels and from Sofia to Singapore.

CLICK HERE

to find out more and book your next workcation space

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Investing in HMOs in the UK:

Benefits, Process, and Risks Explained

By Dean Parata

In the UK, HMO stands for House in Multiple Occupation. It refers to a type of rental property where at least three tenants from more than one household share common facilities such as a kitchen, bathroom, or living area.

HMO’s are subject to specific regulations and licensing requirements to ensure the safety and well-being of the tenants.

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What are the benefits of owning an HMO?

1. Increased rental income

HMOs often generate higher rental yields (minimum 12% gross yield upwards) compared to traditional single-let properties. Since multiple tenants occupy the same property, landlords can charge individual rents for each room, resulting in a higher overall rental income.

2. Diversified tenant pool

With an HMO, landlords can attract a range of tenants, such as students, young professionals, or individuals looking for affordable shared accommodation. This diversification reduces the risk of having a property vacant for extended periods.

3. Reduced financial risk

With multiple tenants, the financial risk associated with rental income is spread across several individuals. Even if one tenant fails to pay rent, the landlord may still receive income from the other tenants, mitigating the impact of non-payment.

4. Flexibility in property use

Converting a property into an HMO can allow vendors to maximise the use of the available space. By creating individual rooms for rent, larger properties that may be less desirable as family homes can be effectively utilised for rental purposes.

5. Potential for capital appreciation

In certain areas with high demand for shared accommodation, HMO properties may experience greater capital appreciation over time. This can provide an opportunity for the vendor to sell the property at a higher price in the future.

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Reasons why we recommend doing the HMO conversion yourself

1. The Price

Turn-key HMO’s will always have a premium added on to them. The companies that develop these properties will need to make their money back somehow. Yields advertised for turn-key HMO’s are usually anywhere from 7-10%. The ROIs on our deals are generally more than 15%. This means that as an investor you are paying more for the property than if they done the works themselves.

2. The Works

The health of an investment should be measured over its lifetime. There are many reputable companies that produce turnkey HMOs, however there are also a lot of not so good ones. When buying turnkey, you are trusting that all the build works have been done correctly and to a high standard as you won’t have any oversight over what was spent and what was done. Leaking pipes? Mould? Faulty electrics? A lot of trust

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needs to be placed in the turn-key provider to ensure these won’t crop up 6 months after purchasing the property. However, when doing an HMO conversion yourself you will see the refurbishment works take place step by step. You will have a complete overview of what was done and assurance that your property will be bulletproof well into the future

3. The Refinance

You will initially need less money upfront when buying a turn-key HMO, however there will be very limited scope to refinance. When doing the conversion yourself, you will be able to capitalise on the increase in value that has been created from conducting the refurbishment works yourself. This will mean that when it comes to refinance time you will be able to pull out a lot of your initial investment.

Who will manage my HMO and provide us with tenants?

A trustworthy HMO agency provides you a turn-key management service for our local and international clients. We have worked very hard over the years to ensure we have built extremely strong partnerships with a local partner.

Once the property is ready, we will provide a formal handover to ensure that the process remains completely hands off.

What kind of ROI’s can you expect?

A good ROI for an HMO investment in the UK typically falls between 15% and 35%. This considers both rental income and potential capital growth. However, it’s highly dependent on location, property type, and management efficiency. However, HMOs are not like typical buy-to-let properties.

Aren’t there too many HMO’s in the UK

In short, there’s not enough. This isn’t just for HMO’s but for UK housing in general. The UK is a small island with limited land and a growing population. The UK government releases official reports every year detailing the extreme shortage of housing - and affordable housing at that. Local councils are also desperate for more affordable and social housing to help with the shortfall needed for the vulnerable, homeless, asylum seekers etc.

Demand for HMO rooms remain extremely strong as HMO’s help by providing affordable housing and utilising one house to accommodate multiple tenants.

CLICK HERE

FOR MORE INFO ON HMO’s

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Fast-Track to European Residency:

Cyprus’s quickest and most affordable Permanent Residency Programme

By Jenny Ellinas

Cyprus offers the fastest, most affordable, and attractive permanent residency scheme in the EU with its FAST TRACK Permanent Residency Programme. This programme allows you to secure permanent residency for up to two generations of your direct family line by investing in just one property.

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The Cyprus Residency Programme Key Features

Generational Benefits: The main applicant, their spouse, and all dependent children up to the age of 25 qualify for residency.

Quick Issuance: Permanent residency permits are issued within 3-4 months and are valid for life.

No Residency Requirement: There’s no need to live in Cyprus for the permits to remain valid.

National Health Programme: Eligibility for Cyprus’ National Health Programme.

Affordable Costs: Enjoy the lowest property-ownership costs in Europe.

Investment Potential: The property can also serve as an investment vehicle.

The Benefits

Time-Saving: Fast processing time and automatic renewal of permits.

Cost-Efficient: No annual tax for residency permits, free healthcare when in Cyprus, low transfer duty, council taxes, and personal taxes.

Investment Advantage: Opportunity to earn Euro-based income, providing a hedge against the ZAR.

The Requirements

Property Purchase: Buy a new residential property in Cyprus for a minimum of €300k + VAT. New properties are defined as newly-built, off-plan, or those where transfer has not yet taken place.

Proof of Income: Demonstrate an annual income of €50k for the main applicant, €15k for the spouse, and €10k for each dependent child.

Clean Police Records: Ensure all applicants have clean police records.

The Fine Print

Location Flexibility: You can buy property anywhere in Cyprus; there are no Special Dedicated Areas (SDAs) for foreign investors.

Property Type: Resales do not qualify for this programme. You can purchase a maximum of two new properties, provided their combined purchase price is at least €300k + VAT.

Minimal Visits: Only one visit to Cyprus every two years is required to maintain residency validity.

Schengen Visa: Currently, a Schengen visa is required as Cyprus is not yet part of the Schengen zone.

CLICK HERE

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Isn’t it time to start planning your future? Explore the incredible opportunities Cyprus has to offer.

Join Cypriot Realty for a tour in Cyprus this September, including 3 FREE nights in a 5-star hotel. Let us help you realize Your Plan B in Europe!

CLICK HERE

TO BOOK FOR THE CYPRUS TOUR

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WEALTH

Louise du Plessis:

The Visionary Estate Agent behind Langebaan’s record-breaking Property Sale

By REI Editorial

In the picturesque coastal town of Langebaan, Western Cape, a landmark real estate transaction has set a new benchmark. Louise du Plessis, an esteemed estate agent with eXp Realty, has achieved a historic sale of R20 million marking the most expensive property deal ever recorded in the area. Known for her exceptional expertise and dedication, Louise’s strategic approach and the property’s distinctive features have culminated in this remarkable accomplishment. This milestone not only highlights her impressive career but also reshapes the local real estate landscape.

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A Heritage Gem Transformed

Originally built in the late 1800s, this property was once owned by the Canestra family, who used it as a base for their fishing business in what was then a small village.

The house has remained largely untouched over the years, making it a heritage property,

Louise explains.

In 2018, she sold it to the current owners, who meticulously renovated it, transforming the three-bedroom cottage into a stunning six-bedroom home complete with a swimming pool.

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Finding the Perfect Buyer

Louise’s client had been searching for a unique beachfront property for a long time. Despite being in Hong Kong during most of the negotiation, Louise successfully managed the process via WhatsApp. “When you have a willing and able buyer and a motivated seller, it simplifies the negotiation,” she notes. The official paperwork began when she returned to South Africa, emphasizing her preference for face-to-face interactions for significant transactions.

Overcoming Challenges

Louise’s primary challenge was being out of the country during the initial negotiations. “WhatsApp and video calls are amazing tools,” she acknowledged, “but face-to-face meetings are still the best way to go for big transactions like this.” Despite the challenge, she’s grateful for the ability to seamlessly facilitate an international deal using cloud-based tools. Upon returning to South Africa, she quickly closed the deal, showcasing her ability to overcome challenges while leveraging technology effectively.

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The eXp Realty Advantage

Louise attributes a significant part of her success to her association with eXp Realty. “Being part of eXp has changed how I feel about real estate,” she shares. The comprehensive tools and global marketing platform offered by eXp Realty have empowered her to confidently market the property on a global scale. “eXp offers unparalleled support with staff available 24/7, and a massive network of agents worldwide, making it easier to run my own business without the overhead costs of a traditional agency,” she elaborates.

CLICK HERE

FOR MORE INFO

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South Africa’s Financial Crisis Unveiled:

Innovative Strategies for Tackling Poverty Optimizing Spending - PART ONE

By Gerhard van der Westhuizen

A comprehensive analysis of South Africa’s financial landscape reveals significant challenges and provided insights into the systemic issues contributing to widespread financial distress among South Africans. This article aims to highlight key points from the presentation and explore potential solutions for individuals seeking financial stability.

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and

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The Financial Distress Landscape

The National Credit Act of 2007 aimed to regulate credit and protect consumers, yet many South Africans remain in financial distress. The National Credit Regulator (NCR) indicates that approximately 8 million people are struggling financially, with many not even under debt review, which serves as a safety net for debt management. Despite legislative efforts, a large segment of the population is ensnared by debt.

Debt-to-Income Ratio: A Key Indicator

One critical metric used to assess financial health is the debt-to-income (DTI) ratio. This ratio is calculated by dividing total monthly debt payments by gross monthly income. For instance, if an individual has a monthly debt payment of R20,000 and a gross income of R50,000, their DTI is 40%.

A DTI ratio below 36% is considered good, 37-41% is manageable, 42-45% is high, and above 46% is very high. Shockingly, the average DTI for individuals earning R20,000-to-R35,000 net income is 127%, and for those earning above R35,000 net, it rises to 172%. These figures underscore the severity of over-indebtedness in South Africa.

Income and Debt: The Harsh Reality

Consider an individual with a gross salary of R30,000 per month. With a DTI of 107%, they allocate R15,600 to debt payments monthly. For higher earners with a gross income of R50,000, R26,700 goes towards debt payments, indicating a similar DTI. This trend reveals that many South Africans are financing their lifestyles through debt, contributing to a cycle of financial instability.

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The Debt Mix

A concerning aspect of South Africa’s households’ debt landscape in 2024 is the composition of new debt applications. Vehicle finance accounts for 23% of debt, home loans for 26%, but the most alarming is unsecured debt, which constitutes 50% of total debt. Unsecured debt, without a collateral requirement, is a significant factor in financial distress. Many individuals prioritize paying off unsecured debts to avoid immediate repercussions, often neglecting secured debts like mortgages, which can lead to severe consequences such as home loss.

Don’t miss the Next edition of Real Estate Investor Mag for Part 2

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NEWS

Balwin expands into rental market with 7 300 Apartments

JSE-listed Balwin Properties announces a major expansion into the rental market with plans to develop up to 7,300 rental apartments over the next 8 to 10 years. This new initiative will utilize approximately 20% of the company’s unused land portfolio, targeting key locations in Johannesburg East, Tshwane East, and the Western Cape.

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Balwin’s CEO, Steve Brookes, stated, “We are excited about this new venture, which complements our build-to-sell model and allows us to expedite the development of our land bank. The rental estates will provide a stable income stream and offer tenants a pathway to home ownership within Balwin’s portfolio.”

The rental properties, exclusively for leasing and not available for sale, will range between R6,000 and R13,000 per month. They will maintain EDGE Advanced certification and feature amenities like solar power, high-speed fibre connectivity, and facial recognition access.

The rental model is expected to generate above-market yields and will contribute to Balwin’s annuity income and net asset value growth. The rollout will also create around 39,000 direct and indirect jobs, supporting construction skills retention.

Balwin Rentals will leverage technology for efficient management, minimizing operational costs and enhancing revenue performance. The development will be phased to manage risk and funded through long-term debt at favourable rates.

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Mosha Senyolo makes history as ASAQS’ first Black Female President

Mosha Senyolo has made history as the first black female President of the Association of South African Quantity Surveyors (ASAQS). Although she describes her appointment as a “surprise,” those around her view it as a well-deserved achievement. Senyolo’s career has been marked by breaking barriers, and this new role is another milestone in her trailblazing journey.

Senyolo reflects on her new position with gratitude, noting, “Becoming the first black woman president of such a respected organization is an honor. It stands as a testament to my dedication and passion for our profession.” Her previous role as junior vice president provided her with valuable insights and preparation for the presidency.

Senyolo aims to build on ASAQS’s legacy while driving innovation. Her focus will be on enhancing member engagement, expanding the association’s influence, and fostering a culture of continuous improvement.

Driven by patriotism and inspired by her father, South Africa’s first black-qualified Quantity Surveyor, Senyolo is committed to advancing the profession and upholding ASAQS’s esteemed values.

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TUHF announces CEO succession Plan

TUHF Group’s founding CEO, Paul Jackson, will retire at the end of December 2025. To ensure a smooth transition, the Board has initiated an 18-month succession plan.

Jackson, who has led TUHF since its inception in 2003, expressed his commitment to leaving the company in a strong position. “TUHF has weathered challenging conditions and is well-positioned for future growth,” he said. Under Jackson’s leadership, TUHF has expanded across 11 South African metros, enhanced its financial architecture, and modernized its operations. The company’s resilience through economic downturns has earned it a strong reputation and attracted interest from international institutions.

The Board, led by Remuneration and Nominations Committee Chairman Mr. Samson Moraba, is overseeing the CEO search with Macdonald & Company recruitment specialists. The goal is to appoint Jackson’s successor by June 2025, with Jackson collaborating closely with the new CEO during his final months. Jackson plans to focus on farming and travel postretirement while remaining involved with TUHF21. “I will miss our team and the business deeply,” Jackson concluded.

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Celebrating Excellence in the South African Residential Property Sector

The 2nd Annual Residential Investment & Development (Reside) Awards in association with Real Estate Investor (REI), which recognise excellence and innovation in the residential property sector, announced the winners for 2024.

Launched in 2023, these awards are the first of their kind in South Africa, acknowledging and celebrating excellence across the entire residential value chain. The gala ceremony, which took place at the Sandton Convention Centre on 18 July 2024, saw an impressive increase in entry categories from five in 2023 to fourteen this year, all keenly contested, ensuring a comprehensive representation of key players in the development and investment space.

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NEWS

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RESIDE AWARDS

Adding their valuable support and encouragement of excellence in the residential sector, Communicare, PSHA, NASHO, SAMRRA and Trellidor all sponsored award categories. A panel of twenty industry judges, made up of leaders and innovators dedicated to advancing South Africa’s residential sector, adjudicated the entries based on strict criteria and scoring.

Neale Petersen, Awards Chair and Founder & Editor-in-Chief of Real Estate Investor (REI), comments, “We can be tremendously proud of the residential real estate sector’s many outstanding achievements this year. The calibre of entries was excellent, and the rise in entry categories shows how important these awards are. By recognising these remarkable achievements and spotlighting excellence, the Reside Awards continue to drive industry standards forward in the residential development and investment sectors.”

The awards are a key component of the annual Reside Summit which, now in its second year, is South Africa’s first and only dedicated residential property development and investment conference to be held annually.

Debbie Tagg, Chair of the Reside Summit, emphasises the broader impact of the awards, “The Reside Awards showcase industry best practices, inspiring others and elevating the reputation of professionals and organisations who excel within the sector. Our Reside Summit theme this year was ‘Transforming Spaces, Enriching Lives’, and the award winners embody this in every way. They are a part of the crucial change in South Africa’s residential property landscape, and we are delighted to honour them.”

2024 AWARDS WINNERS

1. Affordable Housing Development of the Year 2024

Winner: Illovo Country Estate - Alley Roads This development was celebrated for its affordability, innovative building technologies, and energyefficient features, providing accessible housing at competitive rental prices. Award sponsor: Trellidor

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2. Social Housing Development of the Year 2024

Winner: Anchorage - Urban Status Rentals Urban Status Rentals was recognised for its inclusive approach, offering low rental costs and community-enhancing amenities, supporting diverse income groups and vulnerable populations. Award sponsor: National Association of Social Housing Organisations (NASHO)

3. Student Accommodation of the Year 2024

Winner: Units on Cape Station - Eris Property Group for and on behalf of investors South African Student Accommodation Impact Investments (SASAII) and Passenger Rail Agency of SA (PRASA) Units on Cape Station excelled with its fantastic location, innovative tech integration, and cost-saving features, providing exceptional accommodation for students. Award sponsor: Private Student Housing Association (PSHA)

4. Multifamily Residential Development of the Year 2024

Winner: Indawo Lifestyle Apartments – Houss, Century Property Development Indawo was recognised for its stunning fittings, continuous operation with backup power, and comprehensive lifestyle facilities, making it a standout in its category. Award sponsor: South African Multifamily Residential Rental Association (SAMRRA)

5. Residential Development of the Year 2024

Winner: Conradie Park - dhk Architects /Jakupa Architects/ Urban Designers Conradie Park was praised for its excellent design and green building practices. It features smart security systems, efficient resource management, and beautiful structures that blend seamlessly into scenic surroundings.

6. Lifestyle Estate of the Year 2024

Winner: Crossways Farm Village - CMAI Development. CMAI Development’s Crossway Farm Village, South Africa’s first Agrihood, was praised for its ‘Enduring Value’ philosophy and for fostering a strong sense of community, with amenities like a village centre and farm-style living, which are aligned with ESG principles.

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7. Property Management Company of the Year 2024

Winner: Ithemba Property Management Ithemba was recognised for its proactive approach to customer satisfaction, quality of service, and community contributions, including significant support for local initiatives.

8. 2024 International Roger Kaufman Award for Societal Impact

Winner: Communicare Communicare become the first company in Africa to be awarded this global honour, which was showcased at the Reside Awards. This recognition is for exceptional achievement within the global community, and Communicare received it for ongoing commitment to providing housing and building flourishing communities, driving positive social change.

9. Retirement Village Development of the Year 2024

Winner: The Retreat - Craft Homes The Retreat was celebrated for its age-friendly design, including elevators, ramp-assisted features, and a fully operational frail care centre, enhancing the quality of life for residents.

10. Residential Estate Agency of the Year 2024

Winner: eXp Realty The agency was praised for quick national expansion and for using innovative technology in marketing and operations.

11. PropTech Innovator of the Year 2024

Winner: Lisa Lisa’s platform has reshaped the market with innovative solutions in commercial real estate leasing, demonstrating significant market impact and user experience.

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12. Contributor of the Year 2024 (Company)

Winner: Khaya Lam (My Home) Land Reform Project Khaya Lam was honoured for its model transforming property title ownership, enhancing personal wealth and stimulating economic growth through private sponsorship.

13. Contributor of the Year 2024 (Individual)

Winner: Erwin Rode, Rode & Associates Erwin Rode was recognised for his pioneering work in property economics and valuation, significantly advancing industry standards and market insights.

14. Lifetime Achievement Award

Winner: Paul Jackson, TUHF (Pty) Ltd With over three decades in the property finance sector, Paul Jackson was honoured for his remarkable career, particularly being a pioneering force in inner-city and rental housing finance. Paul is a champion of sustainable development and urban revitalisation in South Africa.

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Simple. Secure. Significant.

Introducing Capital Guaranteed Investment

Opportunity Private Capital is pleased to announce an investment opportunity with Guaranteed Capital Protection. This exclusive offering, with limited capacity, involves investing in fully completed units in new developments, with fixed returns of 14% per year. With an investment period estimated at just two years, these shorter investment timeframes compared to traditional property investments are advantageous.

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INVESTMENT SUMMARY

INVESTMENT SECURITY

Capital Investors are invited to participate in a limited investment offering. The primary consideration for the offering is the protection of invested capital. Development assets (properties) are held as security for capital, until investors are repaid.

The total Investment required for this participation is R 14 250 000, with a minimum investment amount of R 100 000. The investment returns are fixed at a rate of 14% per year.

RISK PROFILE

LOW

LOW MEDIUM MEDIUM MEDIUM HIGH

HIGH

INVESTMENT TERM

(PROJECTED)

1 YR

2 YRS

3 YRS

4 YRS

5 YRS

INVESTMENT OBJECTIVE

The investor’s capital is protected by the property. MEDIUM HIGH LOW MEDIUM 100% Private investment HIGH in MEDIUM structure - no mortgage bonds Independent Security Trust mandated to safeguard investor interests. Properties are located in highdemand areas in Cape Town. Proven track record.

IMPORTANT FACTORS

Capital Guaranteed. Secured investment structure. Limited investment offering. Estimated 24-month investment period. New property, recently constructed.

Opportunity Private Capital was founded in 2006 and is a boutique investment company located in Cape Town. Secure investment opportunities are provided for private investors to invest capital in residential properties and developments.

The aim is to provide private investors with alternative diversification by offering access to investing in residential property projects. The result being formidable returns based on reasonably predictable timeframes with assets employed to protect invested funds.

Opportunity Private Capital (Pty) Ltd is a licensed Financial Services Provider. Number FSP53400.

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Monthly Economic Snapshot

Co-founder of Opportunity Private Capital, Nick Morgan summarises June’s economic indicators and takes a look at the rise of alternative investments.

Local Economic Indicators (30 June 2024)

All-Share Index 30 June 2024: +- 79,707

All-Share Index 30 June 2023: +- 76,028

Market PE ratio: 13.8

USD/ZAR R18.05/$

South Africa 10Y Government Bond yield: Current 10.21%

(Data: Bloomberg; SimplyWallSt; Tradingeconomics.; Google Finance.)

News

The ANC losing their majority in the recent elections has paved the way for a Government of National Unity (GNU). After protracted negotiations the Cabinet posts have finally been decided, leading to a more bloated Cabinet than before, made up of a range of parties within the GNU. The party breakdown in terms of positions as follows: ANC(20), DA(6), IFP(2), PA(1), PAC(1), Good(1), FF+(1). Whether this leads to a more efficient government only time will tell, despite a very low bar. According to the UN, the world economy is set to grow by 2.7% in 2024. The Labour Party in the UK recently trounced the Conservatives to sweep to power in the General Elections. Led by Sir Keir Starmer, this is the first time in 14 years that the Party will be occupying 10 Downing Street

THE RISE OF ALTERNATIVE INVESTMENTS

Well, well, well, the high inflationary environment over the last few years has seriously eroded the purchasing power of consumers around the globe. The muted returns achieved by investors in the traditional sector has not shown a clean pair of heels to the ever-present shadow of rising prices in recent years. So, where to now?

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For many, the answer lies with alternative investments, which according to (Pickel, 2023) “are usually a wayto get a direct stake in parts of the economy using more practical analysis. They also offer some distance from the markets’ mood.” Importantly, they offer the potential for better returns.

offer the potential for better returns. Investing in alternatives offers investors a range beyond what is available on public markets. The scope is broad and encompasses, among others, Private Equity (venture capital/growth equity etc.), Debt Investing (private/distressed debt), Hedge Funds (managed funds), Commodities (oil, precious metals etc.), Collectibles (whiskey/art etc.) and Real Estate (properties/development projects). In short, much to choose from. The increase in demand globally over the last couple of decades has been meteoric – prior to the 2008 Global Financial Crisis the alternatives industry managed around $2.2 trillion AUM (Assets Under Management) with this demand expected to rise to $17.2 trillion AUM by 2025.

(Sawhney, 2022). Interestingly, the average retail investor has viewed alternative assets with skepticism, preferring the exposure to traditional investment offerings. In contrast, ‘alternatives’ have been staples in the portfolios of high-net-worth investors for an exceptionally long time. So, why has it taken so long for others to catch on? One of the answers may lie in accessibility, with the barriers to entry to such investments decreasing constantly. Now, the average investor really has some choices should they be intent on winning the battle against inflation. And with the growth in demand being witnessed in the alternatives space it seems this message is getting across. It certainly looks as though Alternative Investments are fast becoming the ‘go-to’ option to supplement a cohesive investment strategy.

GRAPHIC OF THE MONTH

Growth in Alternative Asset Investments Globally

Opportunity Private Capital (Pty) Ltd, is a licensed Financial Services Provider, number FSP53400.

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Until our next edition of REAL ESTATE INVESTOR Magazine

In September 2024

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