February 2025 edition: full text

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REI MAGAZINE FEBRUARY 2025

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Publishing & Editorial Team

NEALE PETERSEN

MARISA GEORGE

FOUNDER & EDITOR-AT-LARGE neale@rei.co.za

ACCOUNTS MANAGER marisa@rei.co.za

GRAHAM MILLER

WEBSITE SPECIALIST graham@rei.co.za

CHRISTIAN SCHUTTE

DIGITAL MARKETER christian@rei.co.za

PAUL VAN RIJSEWIJK

SENIOR DESIGNER paul@rei.co.za

CONTRIBUTORS

Greg Dart Robin Booth Jaco Grobbelaar Jason Lee Schalk van der Merwe

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Daniel Lombard Gerhard vd Westhuizen Paul Stevens Saša Slankamenac Danie van der Merwe

REI MAGAZINE FEBRUARY 2025

Eric Nienaber Nicola Chaning-Pearce Simon Dippenaar Daniel Ryan Johann van der Merwe

Malcolm Horne

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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

A New Year, New Possibilities: A Focusing

on the Micro to thrive amid Macro Challenges

2025 has started with vibrant energy, but controversy continues to surround South Africa’s economy. For investors, it’s crucial to look beyond the macroeconomic headlines and focus on the micro-environment— the factors within your control. While national and global markets can feel uncertain, concentrating on what you can manage—like a property portfolio or market trends—can unlock significant opportunities.

This issue explores a key macro challenge: the Expropriation Act, which is now law. Though seen as a significant step, it mostly updates existing laws. The potential impact on South Africa’s property market is substantial, especially after global figures like former US President Donald Trump voiced concerns. However, South Africa’s resilience remains strong, with backing from the European Union offering international support. We dive into the Expropriation Act’s real impact and potential opportunities.

Another highlight is Broll Property Group’s 50 years of leadership in Africa’s commercial real estate. Their long-standing success demonstrates the importance of adaptability and strategic thinking in today’s volatile market.

With interest rates down and disposable income rising, buyers can take advantage of more affordable borrowing. As sales volumes grow, price increases could follow.

In conclusion, while the macroeconomic outlook may present challenges, the key to success is focusing on opportunities within our day-to-day markets. Embrace the micro-environment for paths to growth and profitability. Enjoy our February 2025 issue, and here’s to successful investing!

Founder & Editor-In-Chief

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MASTER QUOTE

An investment in knowledge pays the best interest.

BENJAMIN FRANKLIN

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Contents FEBRUARY 2025 – Issue #176

UPFRONT

04 PUBLISHING TEAM & CONTRIBUTORS 06 EDITOR’S VIEWPOINT: Neale Petersen 12 ASK THE EXPERTS: Damian Judge

COVER STORY

16 MASTER INVESTOR: Malcolm Horne, Group CEO, Broll

INVESTING

28 SHORT-TERM RENTAL REGULATIONS What SA can learn from Global Challenges 36 MAXIMISING RETURNS: Properties that generate ‘Positive’ Cash Flow’ from Day One

RESIDENTIAL

46 ESSENTIAL STEPS TO FOLLOW How to Determine the ‘Right price ‘when buying Property 54 THE RISE OF AIRBNB-CENTRIC DEVELOPMENTS Shaping the Future of Real Estate Investment

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FINANCE

60 POSITIVE START TO 2025 Reserve Bank cuts interest rates 25 basis points – Prime Rate now 11% 56 RESTART WITH WEALTH ASSIST A Smarter, More Profitable Real Estate Investment Model’

PROPERTY MANAGEMENT

72 MASTERING DEPOSITS Essential Insights for Tenants and Landlords to avoid disputes 80 INSPECTIONS & MAINTENANCE Master 5 Key Conversations to boost Rental Asset Management

TECHNOLOGY

86 ARTIFICIAL INTELLIGENCE Cut through the ‘AI Hype’ to unlock real Business Value 92 AI’s FUTURE: Key Lessons from the DeepSeek R1 Release

COMMERCIAL

96 HIGH STREET AUCTION COMPANY Lifting the hammer to unlock property value amidst economic challenges

OFFSHORE

102 INVEST IN THE US WITH CONFIDENCE Why South African Investors should choose CMB Regional Centers

WEALTH

114 EXPROPRIATION ACT BECOMES LAW A new era or the same old fault lines?

EVENTS & WEBINARS

120 UPCOMING WEBINARS & EVENTS Featured Real Estate Events 2025

NEWS

132 TOP STORIES IN REAL ESTATE Read the Latest Headlines

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Ask the Experts

Make Home Security a Priority: Essential Checklist for evaluating safety before you buy

MEET OUR GUEST EXPERT

DAMIAN JUDGE

Sales & Marketing Executive Trellidor

Question

How can prospective property buyers effectively evaluate the security features of a property to ensure it meets their needs and avoid costly retrofits or potential risks?’

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Answer from Damian Judge

When evaluating the security features of a property, prospective buyers should approach the process with a keen eye for potential vulnerabilities.

Begin by assessing the existing security measures such as burglar bars, security gates, and locks on doors and windows.

Are they well-maintained and properly installed? Ensure that all access points are secure, and check for weaknesses, especially with sliding doors or windows at ground level.

Additionally, consider the property’s perimeter security. Is the wall or fence sturdy and visible to deter intruders, or does it create blind spots that criminals could exploit? It’s important to assess not only the immediate security measures but also potential risks like nearby vacant land or poorly lit areas.

A thorough inspection should also include looking for any missing features, such as security cameras, beams, or adequate lighting, and if necessary, consult a security company for a professional evaluation. Keep in mind that retrofitting security measures like shutters or burglar bars can be expensive, so it’s crucial to factor these costs into your budget or negotiate the price accordingly.

Lastly, security should be a layered approach. A combination of features such as reinforced doors, mesh screens, and strategically placed security gates can help make a home more secure. Prioritize safety over aesthetic features, and always ensure that the home you choose offers both comfort and peace of mind for you and your family.

When it comes to securing your property, it’s important to find a security partner you can trust. Choosing the right security solution can feel overwhelming. Opting for well-established, triedand-tested products can go a long way in ensuring long-term protection and peace of mind.

Got Questions? We’ve got Answers! Send your queries to info@rei.co.za

Enquire here

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Cover Story

Malcolm Horne: A Estate Sector celebrating

By Neale Petersen

As Broll Property Group celebrates its 50th anniversary, one man stands out as the driving force behind its extraordinary success and evolution: Malcolm Horne.

Serving as the Group CEO since 2010, Horne has played an instrumental role in transforming Broll from a regional player to an internationally recognised market leader.

Under his leadership, Broll has expanded its footprint across 13 African countries, and continuously set benchmarks for excellence in the real estate industry. In this interview, Horne reflects on his career, the company’s milestones, challenges faced, and the lessons learned throughout the journey.

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visionary leader in the Real Broll’s 50th Anniversary

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A Career Built on Integrity and Vision

Malcolm Horne’s career began far from the real estate sector. Trained as a public prosecutor, Horne initially pursued a career in law before making a decisive transition to property. His move into the real estate sector was driven by an innate desire to create something lasting and impactful - values that would become the foundation of his career at Broll.

Horne joined Broll Property Group in 2003, taking on a range of roles across the business, including Executive Manager of Properties for the Joint Municipal Pension Fund and Property Portfolio Manager at BSA Property Managers. These early experiences across various facets of the real estate sector provided him with invaluable industry insight and helped shape his leadership style. In 2010, he was appointed Group CEO - a pivotal moment in his career. Since then, he has been instrumental in Broll’s growth and success. Over the past two decades, he has played a key role in securing and negotiating Broll’s affiliations with international partners, both NYSE-listed companies, further cementing Broll’s reputation as a hub for industry excellence on the global stage.

At the core of Horne’s leadership philosophy is a commitment to integrity, collaboration, and a shared vision. He has always believed that strong, transparent leadership is the key to driving long-term success. His focus has been on building a company that is not only commercially successful but also one that adds value to the communities it serves. This vision has been pivotal in shaping Broll’s journey over the last 50 years.

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BROLL PROPERTY GROUP

The Growth of Broll Under Horne’s Leadership

When Horne took the reins as Group CEO in 2010, Broll was already wellestablished within South Africa, but under his leadership, the company began its rapid expansion across the African continent.

With Broll’s footprint growing, Horne focused on expanding the company’s service offerings and regional presence. By 2025, Broll had a presence in 13 African countries, from South Africa to Kenya, Nigeria, Ghana, and beyond. This expansion marked a crucial turning point, not just for Broll but for the broader real estate industry in Africa, which had largely been underdeveloped and fragmented.

Under Horne’s leadership, Broll became one of the first African companies to offer integrated real estate services on such a large scale, specialising in property management, occupier services, facilities management, among others.

A testament to Broll’s regional growth is its training academy, which Horne established in 2004. This initiative aimed to address the skills gap in the African real estate sector by providing top-tier training to industry professionals. Since its launch, the Broll Academy has trained thousands of individuals across the continent, contributing to the development of local talent and raising the bar for professional standards within the industry.

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MALCOLM HORNE PROFILE

Position: Group CEO, Broll Property Group

Company’s Uniqueness? Broll Property Group stands out for its purpose-driven approach in building successful businesses within developing markets. By embedding itself in diverse regional contexts, Broll has fostered economic growth, created jobs, and empowered local communities. The company’s 50-year legacy has transformed local talent and elevated industry standards across Africa.

Education & Qualifications: Bachelor of Law from the University of South Africa (1986) Completed Strategy Execution at Harvard Business School under Professor Robert Kaplan (2015) NQF 5 qualification

What do you enjoy most about running your business?

What excites me daily is the chance to make a real impact across the continent - whether revitalising properties, creating jobs, or shaping a lasting value, leaving a legacy, and transforming lives in meaningful ways.

What was your first pay cheque:

My first pay cheque was modest but taught me the value of hard work. I spent it wisely on essentials and saved the rest—lessons in discipline that I carry into business today. It also taught me to appreciate every milestone, no matter how small, as part of the larger journey.

Is there someone whose life or work you admire, and who has been a guiding influence in your life or career?

I deeply admire my father, who, despite not completing matric, built a successful career as a tradesman and led a large engineering firm. He taught me the values of hard work, discipline, and honesty—principles that have shaped my leadership. His journey proves that with dedication and vision, remarkable things can happen.

I also respect our chairman and founder, Jonathan Broll, whose entrepreneurial spirit created this business 50 years ago. The company was built from humble beginnings - a single block of six flats in Parow South called Chas Bina Hof. His humility and vision have built a legacy that shows true success comes through hard work and perseverance.

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Malcolm’s Personal Philosophy

My personal motto is,

Together, we go fast. Together, we go far.

This reflects his leadership philosophy. Malcolm believes in the power of teamwork to achieve long-term success, and this ethos is at the core of Broll’s culture.

Broll’s First Managed Property – A residential building, ‘ Chas Bina Hof’ in Parow South, Cape Town

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Navigating Challenges: From the Pandemic to Civil Unrest

Throughout his tenure as Group CEO, Horne has faced numerous challenges, and each one has provided invaluable lessons in leadership, resilience, and adaptability.

Perhaps the most significant test of Horne’s leadership came during the COVID-19 pandemic. As a company activity or operations across 37 countries in Africa, Broll faced unique challenges in ensuring business continuity. Horne and his executive team quickly implemented the company’s Business Continuity Plan (BCP), which had already been put in place years prior. The proactive planning ensured that Broll was able to transition to remote work seamlessly, despite the uncertainty caused by the pandemic.

Beyond the logistical challenges, Horne was particularly moved by how the company’s employees responded to the crisis. The pandemic created a deep sense of camaraderie within the company, with employees going out of their way to support one another.

For example, those with excess leave offered it to colleagues who were struggling with caregiving responsibilities. This spirit of solidarity and empathy was a reminder that in times of crisis, human connection is just as important as business continuity.

Horne also implemented the “Strengthening The Core” strategic plan during the pandemic - a forward-thinking initiative designed to refocus the business on its core strengths. This strategy was deliberately crafted to drive long-term growth by reinforcing Broll’s core operations and continuously refining its primary service lines.The Core Strategy laid the groundwork for new service lines at Broll, including Broll Risk Management, Workplace Strategy (Internal Developers), and Broll Soft Services. These new initiatives not only helped Broll weather the storm during the pandemic but also positioned the company for future growth.

Civil unrest also posed a significant challenge to Broll, particularly during the riots in KwaZulu-Natal in July 2021. Once again, Horne and his team proved their resilience, responding quickly and effectively to ensure the safety of employees, customers at malls - whilst securing the safety of their clients assets and continuity of operations.

Broll’s ability to navigate such crises underscored the importance of having robust frameworks and comprehensive business continuity plans in place.

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Pioneering Innovation: Broll’s Technological Edge

A defining characteristic of Broll’s success under Horne’s leadership is its focus on innovation. Recognising that the real estate industry was becoming increasingly digital, Horne pushed for the development of proprietary technologies that could give Broll a competitive edge. One of the most notable of these innovations is B#, Broll’s advanced technology platform that leverages data and analytics to provide clients with real-time insights and operational efficiencies.

The decision to invest in B# was a calculated risk that paid off handsomely. At the time, PropTech (property technology) was still in its early stages, but two decades ago Horne saw the potential for technology to transform the way Broll operated. By adopting and developing cuttingedge tools like B#, Broll was able to offer tailored solutions that delivered measurable value to clients and enhanced the company’s reputation as a forward-thinking leader in the real estate sector.

Another example of Broll’s commitment to innovation is its focus on sustainability. Horne has always believed that real estate should contribute to a sustainable future. Broll has implemented numerous green initiatives, including energy management solutions and water conservation programs, aimed at reducing the environmental impact of its operations - which is delivered through it’s division ‘EWS (Energy, Water & Sustainability.

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Malcolm’s Key Career Highlights at Broll

Strategic Leadership at Broll Property Group Malcolm has been the Group CEO and a shareholder of Broll Property Group for many years, leading the company to become a Pan-African market leader in commercial property services. Under his leadership, Broll has grown exponentially, now serving clients across 13 African countries, with future plans to expand into the UAE.

Global Recognition and Industry Awards Malcolm’s leadership has earned Broll numerous international accolades, including the Lifetime Achievement Award at the African Property Investment (API) Events in 2022. His ability to secure global partnerships, such as Broll’s current affiliation of their Occupier Service division with Cushman & Wakefield, has positioned the company as a leading player in the global real estate market.

Growth and Expansion of Broll Under Malcolm’s stewardship, Broll has expanded its footprint, growing tenfold in terms of size and geographic reach. The company now employs over 2,500 property professionals and has strengthened its presence across Africa. Malcolm has played a critical role in driving revenue growth by securing new clients and expanding services.

Innovator and Industry Mentor Malcolm is known for his entrepreneurial mindset and focus on corporate governance, helping balance strong leadership with strategic expansion. He is a passionate mentor in the industry, providing invaluable guidance to emerging talent. In 2004, he launched the first property training academy to advance skills in the real estate sector.

Contributions to Industry Leadership A respected figure in the real estate industry, Malcolm has held multiple directorships on significant boards. His leadership roles include serving on the South African Property Owners Association, the African Retail Advisory Board of the International Council of Shopping Centres, and the South African Council of Shopping Centres, where he also served as Past President.

Comprehensive Service Offering Today, Broll is a multi-disciplinary real estate service provider, specialising in a wide range of services including property management, facilities management, valuations, interior design, workspace solutions, energy management, and more. Broll’s ability to innovate and integrate technology ensures it remains at the forefront of the industry.

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Building and Nurturing Broll’s Company Culture Company culture isn’t just about the present; it’s about preparing for the future. As a leader, I constantly ask myself: How are we setting this business up for the next 50 years?

This question drives everything we do. Embracing innovation, integrating new technologies, and welcoming fresh perspectives are all crucial components of this evolution.

But at the heart of any strong culture is character. Who we are as individuals shapes the company we become. Honesty, integrity, and compassion are not just values - they’re our guiding principles. If you consistently do what’s right, everything else falls into place. Treat others as you’d like to be treated; it’s simple, but not always easy.

At Broll, our culture is built on five core pillars that define how we operate and work together:

• High Performance: We move fast, adapt quickly, and take full ownership of our actions. Accountability goes beyond expectations - we hold each other to 200%.

• Service Excellence: We don’t just meet expectations; we exceed them. Building relationships and always taking action are fundamental to our success.

• Innovation: We continuously rethink, reimagine, and set new benchmarks. Technology plays a key role in driving our progress and ensuring we stay ahead.

• Caring Culture: We invest in our people and foster inclusivity across all our regions in Africa. Our commitment extends through initiatives like Broll Academy and the Broll Foundation, ensuring we lift others along the way.

• Growth: Our success is directly tied to our clients’ success. When they grow, we grow. We believe in shared prosperity and mutual success.

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Culture isn’t something that happens overnight—it’s built daily through consistent action. It starts with leadership. By staying true to our values and principles, the right culture follows naturally.

Broll’s Legacy: 50 Years of Pioneering Real Estate Services in Africa

At Broll, we’ve spent 50 years pioneering real estate services in Africa, and during that time, we’ve learned one crucial lesson: those who embrace change, thrive.

As chairman and founder, Jonathan Broll, says, “If you only read the headlines, you’d never get out of bed.” This reflects a powerful mindset that real leadership isn’t about reacting to fear but about focusing on what’s real and tangible.

The Future of Broll Looking ahead, Horne is focused on expanding Broll’s footprint beyond Africa, with plans to grow in the Middle East. Additionally, the company is committed to sustainable real estate solutions that align with global environmental goals.

Advice and Legacy Horne’s advice to aspiring entrepreneurs is simple: believe in yourself, take risks, and surround yourself with people who know how to win. As for his legacy, Horne hopes to leave a lasting impact on the real estate industry, one that priorities integrity, innovation, and sustainability. As Broll celebrates 50 years of excellence, Horne’s leadership has been instrumental in shaping the company’s journey, ensuring that it remains at the forefront of Africa’s real estate sector.

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Investing

Short-Term Rental What South Africa can from Global Challenges

By Robin Booth

The rapid rise of Airbnb and other short-term rental platforms has transformed the global property market. While these platforms have provided lucrative income opportunities for property owners and helped boost local tourism, they have also led to housing affordability concerns in many cities.

As a result, governments worldwide have introduced stricter regulations to curb shortterm rentals, with varying degrees of success.

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Regulations learn

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The main issues

• Strict short-term rental regulations, like those in New York and Edinburgh, often have unintended consequences, harming tourism and housing markets.

• South Africa’s short-term rental industry boosts tourism and employment but faces housing affordability concerns, requiring careful regulation design.

• Balanced regulations, including zoning, seasonal flexibility, and reasonable taxation, are key to avoiding negative economic impacts from restrictive policies.

However, many of these regulations have had unintended economic consequences, often undermining the very goals they sought to achieve. Some cities have experienced housing markets that failed to adjust as expected, while others saw tourism declines, economic slowdowns, or shifts in rental demand to surrounding areas.

With South Africa considering its own set of short-term rental regulations, examining these global case studies provides critical insights into what could happen if policies are not carefully structured.

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Case Study: New York City In 2023, New York City enacted Local Law 18, imposing some of the most restrictive short-term rental laws in the world. This law required Airbnb hosts to be physically present during a guest’s stay and limited rentals to a maximum of two guests for stays under 30 days. The intention was to free up housing stock for long-term rentals and reduce rising rent prices by discouraging property investors from renting out entire apartments for short-term stays.

The result? A mass exodus of Airbnb listings. Thousands of hosts, unable to comply with the new law, removed their properties from the platform. While city officials hoped this would increase rental availability and lower prices, housing costs in New York remained high. Instead of seeing a sudden drop in rent, landlords simply rented out properties at higher longterm rates or left them vacant while waiting for legal loopholes or future policy changes.

Furthermore, the demand for short-term stays didn’t disappear—it shifted. Travelers still needed flexible accommodation, so instead of staying in New York City, they booked properties in neighbouring areas like New Jersey, which still allowed short-term rentals. This shift resulted in economic losses for New York businesses that rely on tourism spending, while benefiting neighbouring regions that saw increased visitor numbers.

Case Study: Edinburgh Edinburgh, Scotland, a city known for its annual Fringe Festival, introduced strict regulations for short-term rentals in an attempt to balance tourism demand with local housing needs. Under the new policies, landlords were required to obtain licenses, meet safety requirements, and comply with detailed inspections before being allowed to rent properties on platforms like Airbnb.

While these measures were intended to prevent overtourism from disrupting residential neighbourhoods, they inadvertently led to a severe accommodation shortage during major events.

The Fringe Festival, which attracts performers and visitors from across the world, depends heavily on short-term rentals. With fewer Airbnb options available, hotel prices skyrocketed, leaving many visitors unable to afford accommodations in the city. The issue became so severe that Edinburgh’s city council temporarily relaxed the regulations to prevent the festival from being negatively impacted.

This case highlights the challenge of imposing blanket regulations that do not account for seasonality or local tourism demands. Instead of creating a sustainable balance, Edinburgh’s strict policies ended up hindering the city’s biggest cultural event, showing that rigid regulations can sometimes do more harm than good.

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Case Study: Chicago Chicago took a different regulatory approach, introducing new taxes and strict data-sharing requirements for short-term rental platforms. The goal was to ensure that short-term rental operators were paying their fair share in taxes and to monitor the number of active rentals in the city.

While this regulation wasn’t an outright ban, the additional costs and administrative burden discouraged many hosts from continuing their Airbnb operations. This resulted in a 16% decline in active listings, which had a ripple effect on both tourism and residents who relied on Airbnb for supplemental income.

The reduction in short-term rental options meant that tourists had fewer affordable places to stay, leading to increased demand for hotels and higher accommodation prices. At the same time, some property owners, who had relied on Airbnb to cover mortgages and expenses, were forced to sell their properties or convert them into long-term rentals, which altered the city’s rental market dynamics.

Chicago’s case demonstrates how high taxation and heavy administrative regulations can push operators out of the market, hurting both the tourism sector and local residents who rely on short-term rentals as an income stream.

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Potential Impacts of Short-Term Rental Regulations in South Africa

1.Increased Housing Supply… but at What Cost?

• If South Africa enacts New York-style regulations, investors may be forced to exit the market, theoretically freeing up properties for long-term tenants.

• However, as seen in New York, this may not result in lower rents—instead, landlords could simply increase prices on long-term leases or hold properties vacant in anticipation of changing regulations.

2. A Market Flood & Falling Property Values

• Many South African investors have purchased properties solely for short-term rentals.

• If short-term rentals were suddenly restricted, we could see a flood of properties hitting the market, potentially crashing property values in highdemand Airbnb areas.

3.Loss of Tourism Revenue & Economic Impact

• A Kelowna-like scenario could play out in Cape Town or Johannesburg, where a crackdown leads to fewer affordable accommodation options for visitors.

• This could result in a drop in tourism numbers, forcing visitors to book hotels at higher rates—or worse, choose other destinations entirely.

4.A Shift to Surrounding Areas

As seen in New York, a strict ban won’t eliminate demand, but rather push it to less regulated areas.

Investors could shift their short-term rental strategies to outskirts and smaller towns, redistributing economic benefits rather than eliminating them.

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What This Means for South Africa South Africa has seen a surge in short-term rentals, particularly in Cape Town, which attracts international visitors year-round. With over 700,000 Airbnb guests in 2023, contributing R14.4 billion to the GDP and supporting 42,000 jobs, the short-term rental industry is a significant economic driver.

However, as in other cities, there are growing concerns about housing affordability and the impact on local communities, prompting discussions about newregulations

A Call for Balanced Regulation

South Africa stands at a crossroads in shaping its short-term rental policies. While some level of regulation is necessary, overly strict laws could damage the economy, reduce tourism revenue, and negatively impact property owners.

Instead of hard bans or extreme restrictions, policymakers should consider:

• Zoning regulations that balance Airbnb demand with local housing needs.

• Seasonal regulations, allowing for greater flexibility during peak tourism months.

• Reasonable taxation, ensuring short-term rental operators contribute fairly without making it financially unfeasible to operate.

• Clear, enforceable compliance measures that avoid pushing the industry underground.

The global case studies of New York, Edinburgh, Chicago, and Kelowna demonstrate that overly restrictive Airbnb regulations often backfire, causing economic downturns, rental market shifts, and unintended consequences.

As South Africa moves toward regulating short-term rentals, it must learn from these international experiences to craft policies that protect housing affordability without harming the tourism sector or crashing the property market. A balanced, sustainable approach is the key to ensuring that both investors and local communities benefit from the growing short-term rental industry.

Find out more

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REI MAGAZINE FEBRUARY 2025

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Investing

MAXIMISING RETURNS: Properties that generate Cash Flow’ from Day One

By Jaco Grobbelaar

Investing in property can be an exciting and lucrative journey, but one of the most critical aspects of success is ensuring that your investments generate positive cash flow. Positive cash flow means that your rental income exceeds your expenses, leaving you with money in your pocket from the very first month.

While many investors focus solely on capital appreciation, achieving strong, positive cash flow ensures financial stability and allows for further portfolio growth.

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‘Positive

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Let’s explore the different types of properties that can generate positive cash flow from day one and key strategies to maximise your returns.

1. Multi-Family Units or Multi-Lets

Multi-family units, such as duplexes, triplexes, or small apartment buildings, provide multiple streams of rental income from a single property. This setup mitigates risk because if one unit is vacant, the income from other tenants helps cover costs.

Additionally, multi-family properties often have lower operational costs per unit compared to single-family homes, making them an excellent choice for generating positive cash flow from the outset.

Properties with Cottages at the Back A highly effective multi-let strategy involves properties with separate cottages or granny flats at the back.

These units allow landlords to rent out additional spaces without needing a completely separate property.

Key advantages of properties with cottages include:

• Higher Rental Yield: Renting out a main house along with separate cottages increases total rental income while keeping overall property costs stable.

• Diversified Income: If the main house is vacant, rental income from the cottage can help cover expenses.

• Attracting Different Tenant Types: The main house can be rented to a family, while the cottage may appeal to single professionals, students, or retirees.

• Flexible Leasing Options: The landlord can opt for long-term rentals, short-term Airbnb-style leasing, or a mix of both for maximum returns.

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Before investing in a property with a cottage, it’s important to ensure compliance with local zoning laws and rental regulations. Additionally, wellplanned access points and privacy measures enhance tenant satisfaction.

Converting a Double Garage into a Bachelor Unit Another way to maximise cash flow is by converting an unused double garage into a self-contained bachelor unit. This is an increasingly popular strategy in high-demand rental areas, as it provides an affordable housing option while generating additional income for property owners.

Key considerations for converting a garage into a rental unit: • Cost vs. Return: Conversion costs vary depending on plumbing, electrical work, insulation, and finishes. However, in most cases, a wellexecuted conversion can generate strong rental returns.

• Legal and Zoning Requirements: Some municipalities may require specific permits before converting a garage into a residential unit. It’s essential to check local regulations before proceeding.

• Amenities and Design: A bachelor unit should include a kitchenette, bathroom, and sufficient lighting to attract tenants. Well-designed compact spaces can command higher rents.

• Separate Entrances and Parking: Ensuring independent access to the unit enhances privacy and tenant satisfaction, which contributes to lower vacancy rates.

Garage conversions are especially effective in urban areas where affordable rental options are in high demand.

These units often appeal to students, young professionals, and singles looking for cost-effective accommodation.

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2. Student Accommodation

Properties near universities and colleges are in high demand, and student accommodation presents a fantastic opportunity for positive cash flow. Instead of renting out a house or apartment to a single tenant, you can charge per room or per bed, significantly increasing your total rental income.

Since student rentals are typically in high demand, vacancy rates remain low, ensuring a steady stream of income. However, investors should be mindful of seasonal turnover and property management logistics when considering this investment type.

3. Short-Term Rentals (Airbnb and Vacation Homes)

Short-term rental properties in high-demand tourist or business areas can generate substantially higher rental income than traditional long-term leases. Platforms like Airbnb allow property owners to charge premium rates, particularly during peak seasons.

However, investors must consider the costs associated with property management, maintenance, and potential vacancy fluctuations.

Ensuring an attractive, well-managed property in a high-demand location is key to maintaining positive cash flow.

4. Co-Living Spaces

Co-living arrangements have become increasingly popular, especially among young professionals and digital nomads. In a co-living space, tenants rent private rooms while sharing communal areas like kitchens and living rooms.

Because rental income is generated from multiple tenants rather than a single lease, overall revenue is higher. Co-living properties also tend to have lower vacancy rates and higher tenant retention, making them a viable strategy for achieving positive cash flow.

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5. Buying Below Market Value

One of the most effective ways to achieve positive cash flow is by purchasing properties below their market value. Finding motivated sellers, distressed properties, or auction deals allows investors to secure properties at a lower cost, resulting in lower bond repayments and increased cash flow potential.

Negotiation skills play a crucial role in this strategy—getting a property at the right price can make all the difference in ensuring immediate profitability.

6. Utilising Refinancing Strategies

However, investors must consider the costs associated with property management, maintenance, and potential vacancy fluctuations.

Ensuring an attractive, well-managed property in a high-demand location is key to maintaining positive cash flow.

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Refinancing can be a game-changer for cash flowfocused investors. By refinancing a property, landlords can secure better interest rates or extend their loan terms, reducing monthly repayments and improving cash flow.

Additionally, refinancing allows investors to pull out equity, which can be reinvested into additional properties to further scale their portfolios.

A smart strategy is to use refinanced funds to subsidise any shortfall in rental income during the initial investment phase.

This approach gives landlords time for rent to increase and catch up with expenses, all without using personal funds. By leveraging the bank’s money instead of your own, investors can effectively manage cash flow while building long-term wealth. However, careful financial planning is essential to ensure that the loan repayments remain sustainable as the property matures.

Maximising Cash Flow Potential

To ensure that your property remains cash-flow positive, consider the following additional strategies:

• Screen Tenants Thoroughly: Selecting reliable tenants reduces the risk of missed payments or costly evictions.

• Keep Operating Costs Low: Optimise property management, maintenance, and utility expenses to protect your profit margins.

• Negotiate Lower Interest Rates: Work with lenders to secure the best possible financing terms.

• Explore Additional Revenue Streams: If applicable, consider renting out parking spaces, storage units, or offering furnished rentals for added income.

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Achieving positive cash flow from day one is not just a dream—it’s a strategy that requires careful property selection, smart financial planning, and a deep understanding of rental markets.

By investing in multi-family units, student housing, short-term rentals, and properties in high-demand areas, investors can secure sustainable, profitable portfolios.

Additionally, strategies like buying below market value, refinancing, and minimising maintenance costs further enhance cash flow potential.

For those looking to build long-term wealth through property investment, focusing on cash flow-positive properties ensures stability, scalability, and financial freedom. Start your search today and take the first step toward building a profitable real estate portfolio!

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REI MAGAZINE FEBRUARY 2025

FROM

ONLY R2796

PER PERSON

FULL DAY PROPERTY INVESTMENT SEMINAR

Hosted by Jaco Grobbelaar

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Includes Colour Workbook

Includes Consultation Discount Voucher

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Limited seats available

CELEBRATING 10 YEARS 45

Residential

How to Determine the buying Property: Essential

By Jason Lee

When it comes to buying property, one of the most crucial aspects is ensuring you are paying the right price. Overpaying for a property can result in financial strain, while underpaying might mean missing out on a great investment opportunity.

Whether you are purchasing a home for personal use or an investment property, it is essential to carefully evaluate the price.

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‘Right Price’ when steps to follow

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So, what are the key steps to help ensure that you are paying a fair and appropriate price for a property.

1. Understand the Local Market

Before diving into property transactions, it is vital to gain a solid understanding of the local real estate market. Local markets can vary widely, and prices can fluctuate based on factors such as location, demand, and the overall economic environment. Researching the area where you are looking to buy is one of the first steps in determining whether the asking price is fair.

Key Steps:

Review Comparable Properties: Look at recent sales of similar properties in the same neighborhood. These are often referred to as comparable. Pay attention to properties with similar square footage, condition, and features.

Check Market Trends: Use online real estate platforms to track price trends in the area. Are prices going up, down, or staying stable? This can give you an indication of whether the price you are looking at is in line with current market conditions.

It is crucial that you try to do apple to apple comparisons as much as is reasonably possible, and that you focus on actual comparable sales and not listings. Listing prices are only a guide and not an indication of the true market value of a property.

2. Hire a Professional Appraiser

A property appraisal is an impartial third-party opinion of a property’s value. A professional appraiser will consider factors such as the location, condition, and recent comparable sales in the area. This can be especially useful if you are uncertain about whether the asking price is too high.

Appraisers are particularly useful in the commercial property sphere as they can use multiple appraisal techniques to determine the market value of the property.

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Key Steps:

• Schedule an Appraisal: Before making an offer or as part of the due diligence phase after you have signed the offer to purchase, hire an accredited appraiser to assess the property’s value.

• Request the Appraisal Report: The appraisal report will include a breakdown of how the appraiser arrived at their valuation, helping you make an informed decision.

• Negotiate Based on the Appraisal: If the appraised value is lower than the asking price, it gives you a strong basis for negotiating a lower price with the seller.

Hiring an independent appraiser is very different to relying on the appraisal that a mortgaging bank does when you get a mortgage.

In this scenario the appraisal is working for the bank and his/her only real mandate is to give the bank comfort that the purchase price is close to market value and that the banks interest will be protected.

This appraisal will unlikely assist you in a negotiating a better deal with the seller.

3. Hire a Real Estate Agent with Local Expertise

A seasoned real estate agent can provide invaluable insights into whether the asking price is fair.

Not only do they have local knowledge, but they also have access to multiple listing and sales data and may have insights that are not publicly available.

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Key Steps:

Find an Experienced Agent: Look for an agent who specializes in the specific area and property type you are interested in. Local agents are often familiar with nuances like school ratings, neighborhood demand, and hidden gems.

Ask for a comparative market analysis report: Your agent can pull together a report, which is a detailed report comparing the subject property to similar properties that have recently sold in the area.

This will give you an idea of whether the asking price aligns with the local market.

4. Examine the Property’s Condition

The physical condition of the property plays a significant role in its value. While an appraiser will account for general condition, you will also want to personally assess the property’s state to ensure you are not overpaying for a place that requires extensive repairs.

Key Steps:

• Hire a Home Inspector: A professional home inspection will provide a thorough evaluation of the property’s structural integrity, systems (plumbing, electrical, HVAC), and overall condition. An inspector can identify problems that might require costly repairs, which should influence your decision on the price.

• Consider Renovation Costs: If the property needs significant renovations, factor those costs into the overall price. This might mean negotiating for a lower price or asking the seller to cover repairs before closing.

• Review Age and Quality of Key Components: Check the age of the roof, windows, plumbing, and other important systems. Older properties may come with charm but could be hiding costly repairs in the future.

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Make sure that you hire your own property inspector and don’t rely on a report that the seller provides.

If the seller is paying for the report, the seller could also influence what is in the report or limit the scope of the report which could be misleading for a buyer.

5. Understand the Seller’s Motivation

Understanding why the seller is putting the property on the market can give you valuable leverage when negotiating the price. Sellers who are in a hurry to move might be more willing to negotiate than those who are not under time pressure.

Key Steps:

• Ask Direct Questions: In some cases, asking the seller or their agent about their reason for selling might give you insights into how motivated they are. Are they facing a relocation or trying to sell quickly due to financial circumstances?

• Look for Signs of Motivation: If the property has been on the market for a long time, the seller might be more willing to accept a lower offer. Similarly, if there have been multiple price reductions, it could be a sign the asking price is too high.

Sadly, the 2 D’s, death and divorce, are often motivating factors that can lead to quick sales at below market prices.

6. Know the Neighborhood and Future Developments

A great property in a declining neighborhood or one with questionable prospects might not be a wise investment. It is essential to assess the area in terms of its long-term value.

Look at how other properties in the neighbourhood have appreciated over time and whether there are any planned developments that might affect the desirability of the area.

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Key Steps:

• Research Neighbourhood Trends: Look at the area’s historical price trends. If the area is steadily growing in value, then you may be more inclined to accept a higher price for the property.

• Look for Planned Developments: Check with the local municipality to see if any infrastructure or development projects are planned for the area. New schools, shopping centers, or public transportation options can make an area more desirable, potentially boosting property values.

But, by the same token, projects such as homeless shelters or developments for other social causes may devalue the property over time.

7. Consider Market Conditions (Buyer’s vs. Seller’s Market)

Market conditions play a huge role in determining a fair price for a property. In a seller’s market, where demand outstrips supply, prices tend to be higher, and there is less room for negotiation. Conversely, in a buyer’s market, buyers have more leverage, and prices are generally more negotiable.

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Key Steps:

• Assess Current Market Conditions: Use data from real estate websites and consult with your agent to understand whether you are in a buyer’s or seller’s market.

• Plan Your Offer Accordingly: In a seller’s market, you may need to be more flexible with your offer, while in a buyer’s market, you might have room to negotiate a lower price.

8. Consider Future Resale Potential

While the price of a property is important today, consider how easily you could sell it in the future. Factors such as the property’s size, style, and location, as well as any potential improvements, will influence its resale value.

Key Steps:

• Look at the Long-Term Appeal: Does the property have features that will remain desirable in the long run, like good schools, public transport links, and future development plans?

• Understand Market Cycles: All real estate markets go through cycles. Pay attention to whether the current price is driven by a short-term spike and consider whether the property will hold its value over time.

Ensuring you are paying the right price for a property requires careful research, expert advice, and due diligence. By understanding the local market, hiring professionals for appraisals and inspections, and carefully evaluating the property’s condition and the seller’s motivation, you can make an informed decision.

Taking the time to assess all these factors will not only help you avoid overpaying but also ensure that your investment is sound and poised for future growth.

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Residential

The Rise of Airbnb-Centric Shaping the Future of

By Robin Booth

In recent years, the real estate landscape has undergone a dramatic transformation, driven by the explosive growth of short-term rental platforms like Airbnb.

As travellers increasingly prioritise unique, flexible, and home-like accommodations over traditional hotels, developers worldwide have begun to recognise the lucrative potential of designing properties that cater specifically to both shortterm and long-term rental markets.

This shift is not only reshaping investment strategies but is also influencing property values and urban planning.

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Developments: Real Estate Investment

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Key features of these Airbnb-centric developments include:

1. Flexible Floor Plans: Units are designed with versatility in mind, allowing owners to easily transition between short-term and long-term rentals.

2. Shared Amenities: High-quality amenities such as co-working spaces, fitness centres, and rooftop entertainment areas cater to the preferences of modern travellers.

3. On-Site Management Services: Many complexes now include professional property management services to assist with guest check-ins, cleaning, and maintenance, making it easier for investors to manage short-term rentals.

4. Smart Technology: Properties are equipped with smart locks, security cameras, and energy-efficient systems to enhance the guest experience and simplify operations for hosts.

Global Trends in Airbnb-Focused Developments

In cities like Dubai, Bangkok, and Miami, developers are embracing this trend with open arms. Dubai, for instance, has seen a surge in developments marketed specifically to short-term rental investors. These properties are strategically located near tourist hotspots and business hubs, ensuring high occupancy rates year-round.

Similarly, in Bangkok, developers are incorporating fully furnished units with hotel-style services to cater to both tourists and expats seeking temporary housing.

In South Africa, particularly in Cape Town and Durban, the appeal of Airbnb-friendly properties is also growing.

These cities, known for their vibrant tourism industries, have seen developers incorporating features such as lock-up-and-go designs and centralised management to attract global and local investors.

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Impact on Property Values

The inclusion of short-term rental potential in a development can significantly influence its market value. On one hand, properties that are Airbnb-friendly often command a premium price due to their dual-purpose appeal.

Investors are willing to pay more for units that offer flexibility, strong cash flow potential, and high occupancy rates during peak seasons.

Furthermore, the presence of professional management services adds an additional layer of convenience, which can increase the overall value proposition.

However, this trend is not without challenges. Critics argue that an overemphasis on short-term rentals can lead to community disruption and inflated property prices, making housing less affordable for local residents.

Some cities have introduced regulations to limit the number of short-term rental permits or impose stricter zoning laws, which can dampen the attractiveness of such developments.

Investor Perspective: Why Pay More for Airbnb-Friendly Properties?

From an investor’s standpoint, the premium price of Airbnb-friendly properties is often justified by the potential for higher returns.

Short-term rentals typically generate higher per-night rates compared to traditional leases. Additionally, the flexibility to switch between shortterm and long-term rental models allows investors to adapt to market fluctuations.

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For example, during peak tourist seasons, investors can capitalise on high nightly rates, while during slower periods, they can opt for stable income from long-term tenants.

This adaptability makes Airbnb-centric properties an attractive addition to any real estate portfolio.

Designing for the Future: The Developer’s Role

Developers play a crucial role in shaping the future of Airbnb-friendly properties. By incorporating sustainable practices, such as energy-efficient designs and eco-friendly materials, they can appeal to the growing demographic of environmentally conscious travellers.

Additionally, thoughtful urban planning that balances the needs of tourists and local residents can help mitigate potential community tensions. Some innovative developers are even partnering with short-term rental platforms to create branded Airbnb buildings.

These partnerships provide investors with access to exclusive marketing support and operational tools, further enhancing the appeal of these properties.

Balancing the Benefits and Risks

While Airbnb-friendly developments offer exciting opportunities for investors, they also come with risks. Market saturation, regulatory changes, and the potential for community pushback are all factors that could impact the long-term viability of these properties.

As such, investors must conduct thorough due diligence and stay informed about local regulations and market trends.

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Conclusion: A Paradigm Shift in Real Estate

The integration of Airbnb into real estate development marks a significant shift in the industry. Developers are increasingly designing properties with short-term rentals in mind, creating opportunities for investors to capitalize on the growing demand for flexible accommodations.

While this trend has the potential to increase property values and generate higher returns, it also requires careful consideration of regulatory, social, and economic factors.

As the lines between hospitality and residential real estate continue to blur, the success of Airbnbcentric developments will depend on the ability of developers and investors to strike a balance between innovation, community impact, and financial sustainability.

For investors seeking to stay ahead of the curve, understanding these trends and their implications is key to making informed decisions in this evolving market.

Find out more

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Finance

Positive Start to 2025: interest rates 25 basis – Prime Rate now 11%

By Neale Petersen

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Reserve Bank cuts points

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The Reserve Bank’s 25bps interest rate cut, reducing the repo rate to 7.50% and the prime rate to 11%, is positive news. As a result of the 25bps rate cut, mortgage repayments will reduce by:

R750 000 bond – from R7 869 to R7,741 (thus saving R128)

R900 000 bond – from R9 443 to R9,290 (thus saving R153)

R1 000 000 bond – from R10 493 to R10,322 (thus saving R171)

R1 500 000 bond – from R15 739 to R15,483 (thus saving R256)

R2 000 000 bond – from R20 985 to R20,644 (thus saving R341)

R2 500 000 bond – from R26 231 to R25,805 (thus saving R426)

R3 000 000 bond – from R31,478 to R30,966 (thus saving R512)

R5 000 000 bond – from R52,463 to R51,609 (thus saving R854)

(Based on a 20-year repayment period at the prime rate) As usual the property industry weighed in with their views

Read more

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South African Interest Rates

Date

2025/01/30 2024/11/21 2024/09/19 2023/05/25 2023/03/30 2023/01/26 2022/11/24 2022/09/22 2022/07/21 2022/05/19 2022/03/24 2022/01/27 2 0 21 / 1 1 / 1 8 2020/07/23 2020/05/21 2020/04/14 2020/03/19 2020/01/16 2019/07/18 2018/11/22 2018/03/28 2017/07/20 2016/03/17 2016/01/28 2 01 5 / 1 1 / 1 9 2015/07/23 2014/08/01 2014/02/01 2012/08/01 2010/12/01 2010/10/01 2010/04/01 2009/09/01 2009/06/01 2009/04/01 2009/03/01 2009/01/01 2008/07/01 2008/05/01 2008/01/01 2007/11/01 2007/09/01 2007/07/01 2007/01/01

%

11,00% 11,25% 11,50% 1 1 ,7 5 % 11,25% 10,75% 10,50% 9,75% 9,00% 8,25% 7,7 5 % 7,50% 7,25% 7,00% 7,25% 7,7 5 % 8,75% 9,75% 10,00% 10,25% 10,00% 10,25% 10,50% 10,25% 9,7 5 % 9,50% 9, 2 5 % 9,00% 8,50% 9,00% 9,50% 10,00% 10,50% 11,00% 13,00% 14,00% 15,00% 15,50% 15,00% 14,50% 14,00% 13,50% 13,00% 12,50%

Date

2 0 0 6 / 1 1 / 01 2006/09/01 2006/07/01 2005/05/01 2004/09/01 2004/01/01 2 0 0 3 / 1 1 / 01 2003/10/01 2003/09/01 2003/07/01 2002/10/01 2002/07/01 2002/04/01 2002/02/01 2 0 01 / 1 0 / 01 2001/08/01 2001/07/01 2000/02/01 1999/11/01 1999/09/01 1999/08/01 1 9 9 9/ 07/ 01 1999/05/01 1999/04/01 1999/03/01 1999/02/01 1 9 9 9/ 01 / 01 1998/12/01 1998/11/01 1998/09/01 1998/08/01 1998/07/01 1998/04/01 1 9 9 7/ 1 1 / 01 1996/12/01 1996/11/01 1996/08/01 1996/06/01 1996/05/01 1995/08/01 1995/03/01 1 9 94 / 1 0 / 01 1993/12/01 1993/03/01

%

12,00% 11,50% 11,00% 10,50% 11,00% 11,50% 12,00% 13,50% 14,50% 15,50% 17,00% 16,00% 15,00% 14,00% 13,00% 13,50% 1 3 ,7 5 % 14,50% 15,50% 16,50% 17,50% 18,00% 19,00% 20,00% 21,00% 22,00% 23,00% 23,50% 24,50% 25,50% 24,00% 22,25% 18,25% 19,25% 20,25% 19,25% 19,50% 20,50% 19,50% 18,50% 17,50% 16,25% 15,25% 16,25%

Date

1992/12/01 1992/08/01 1992/05/01 1991/11/01 1 9 9 1 / 0 5 / 01 1989/11/01 1989/06/01 1989/03/01 1988/12/01 1988/08/01 1988/06/01 1988/04/01 1988/02/01 1987/02/01 1 9 8 7/ 0 1 / 0 1 1 9 8 6 / 1 0 / 01 1986/09/01 1986/06/01 1986/02/01 1985/12/01 1985/11/01 1 9 8 5 / 1 0 / 01 1985/08/01 1 9 8 5 / 07/ 01 1985/06/01 1985/02/01 1 9 8 5 / 01 / 01 1984/12/01 1984/09/01 1984/08/01 1984/04/01 1 9 8 4 / 01 / 01 1983/12/01 1983/09/01 1 9 8 3/ 07/ 01 1983/04/01 1983/03/01 1983/02/01 1982/12/01 1982/04/01 1982/03/01 1 9 8 2 / 01 / 01 1 9 8 1 / 0 8 / 01 1 9 8 1 / 0 7/ 0 1

%

1 7, 2 5 % 18,25% 19,25% 20,25% 20,00% 21,00% 20,00% 19,00% 18,00% 16,00% 15,00% 14,00% 13,00% 12,50% 12,00% 13,50% 14,00% 14,50% 15,50% 16,50% 18,50% 19,50% 21,00% 22,00% 23,00% 25,00% 24,00% 23,00% 25,00% 22,00% 21,00% 20,00% 19,00% 18,00% 16,00% 14,00% 16,00% 17,00% 18,00% 20,00% 19,00% 17,00% 16,00% 14,00%

Date

1 9 8 1 / 0 6 / 01 1 9 8 1 / 0 4 / 01 1 9 8 1 / 0 3 / 01 1 9 8 1 / 0 2 / 01 1979/09/01 1979/04/01 1979/03/01 1 9 7 8 / 1 0 / 01 1978/09/01 1 9 76 / 07/ 01 1975/11/01 1975/09/01 1975/08/01 1 9 74 / 1 1 / 01 1 974 / 0 9/ 01 1 974 /06 /01 1 974 / 0 3 / 01 1973/12/01 1973/08/01 1973/05/01 1 97 2/09/01 1971/05/01 1971/04/01 1 9 70 / 1 0 / 01 1968/09/10 1 9 67/ 07/ 0 1 1 9 6 6 / 07/ 1 5 1965/03/08 1964/12/12 1964/07/24 1962/12/01 1 962 / 07/ 01 1962/01/01 1 9 61 / 0 5 / 1 5 1960/08/19 1 9 5 9/ 01 / 2 2 1958/06/01 1955/10/01 1952/04/01 1949/10/17 1948/12/31

%

13,00% 11,50% 11,00% 10,00% 9, 5 0 % 10,00% 11,00% 11,50% 12,00% 12,50% 12,00% 11,50% 11,00% 12,00% 11,00% 10,00% 9,0 0 % 8,00% 7, 5 0 % 8,00% 8,50% 9,0 0 % 8,50% 8,50% 8,00% 8,50% 8,00% 7, 0 0 % 6,50% 6,00% 5,50% 6,00% 6,50% 7, 0 0 % 6,50% 6,00% 6,50% 6,00% 5,50% 5,00% 4,50%

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Finance

Restart with Wealth ‘Real Estate Investment

By Daniel Lombard & Gerhard van der Westhuizen

For decades, property investment has been centered around buy-to-let models, where investors purchase real estate, rent it, and hope for a good capital appreciation.

While this traditional model is an average to good investment, it often falls short of greatness—after all, good is the enemy of great. Although it has served many, it comes with its fair share of risks—market fluctuations, rising interest rates, levies, unpredictable maintenance costs, and property management challenges.

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REI MAGAZINE FEBRUARY 2025

Assist: A Smarter Model’

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Redefining Real Estate Investing in a Changing Market

At Wealth Assist, we understand that investors seek predictability, security, and above-average to high returns—without the hassle of property management.

That’s why we’ve developed the Wealth Assist Investment products, such as the Buy & Lease Back model, which offers higher returns while mitigating the risks of traditional buy-to-let investments.

The newly added RE-Start product enhances our already groundbreaking investment solutions. While it shares similarities with buy-to-let—as the property is purchased to hold—it differs significantly from our standard Buy & Lease Back products, where investors typically exit within a two-year cycle.

Introducing RE-Start: Elevating Real Estate Investment RE-Start is a structured buy-and-leaseback investment product that provides strong income and capital growth while solving a pressing issue in the distressed and impaired Real Estate Owner market.

The core of RE-Start lies in impact-driven investing—investors acquire properties from homeowners who cannot qualify for recovery solutions but with consistent monthly income, ensuring they stay in their homes while creating predictable financial returns for investors.

Here’s how the Wealth Assist Investment Model works:

• Property Acquisition Below Market Value: Investors purchase properties at 85% of market value, including all transfer duties and costs upfront.

• Higher Gross Return: The previous owner remains as a long-term tenant, paying rental equal to Prime + 3% net rental yield, along with all expenses.

• Fixed Exit Strategy: At the end of the 36-month lease, the tenant has the option to repurchase the property at a predetermined price, ensuring at least an additional 4,75% p.a. capital growth

• Prime + 3% return payable monthly: Alternatively keeping the property with the option to sell or rent at only 85% of market value.

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REI MAGAZINE FEBRUARY 2025

Why RE-Start Outperforms Buy-to-Let

The traditional buy-to-let model relies only on market-driven factors like fluctuating rental demand, property price appreciation, and unpredictable levy and municipal rate increases.

RE-Start eliminates these risks through pre-determined, risk-mitigated investment returns:

Pre-determined ROI: Investors secure property at 15% below market value. Capital growth of Minimum 4,75% p.a. for the lease term plus the net rental of prime + 3%

No Property Management Headaches: The tenant is responsible for all maintenance and collection fees, reducing unexpected expenses.

Reduced Market Volatility Risks: Unlike buy-to-let, which depends on rental market fluctuations, RE-Start locks in fixed returns from day one.

Impact Investing with Financial Rewards: Investors make a meaningful social impact by helping distressed homeowners recover and rebuild while earning strong financial returns.

Recovery: Buy & Leaseback vs. Re-Start: Buy-to-Hold Model

Wealth Assist’s Recovery product has already demonstrated impressive results for investors, providing consistent above-market returns while offering homeowners a chance to regain financial stability.

RE-Start builds on this foundation by offering a Buy-to-Hold product, similar to Buy-to-Let, but with substantially higher returns and lower risk.

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Why Now is the Best Time to Invest in RE-Start With rising economic pressures and increasing homeowner distress, the demand for innovative property investment models has never been higher. RE-Start is not just an investment—it’s a smarter, more sustainable way to build wealth while transforming lives.

Learn more

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REI MAGAZINE FEBRUARY 2025

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Join us for an exclusive deep dive into Understanding Your Investment Product, where you’ll uncover why high-net-worth investors are committing to a 10-year wealth-building strategy with Wealth Assist.

These are not your traditional real estate investments—our niche, highperformance products like On Sale, Recoveries, Assist to Own, and Tranches are reshaping how smart investors secure their financial future. Don’t miss the opportunity to gain insider insights that could redefine your investment approach forever.

REI & Wealth Assist Webinar & Live Seminar Series Attend on the following dates and times:

• Tuesday, 25 March @ 19h00 • Tuesday, 6 May @19h00

Learn more

About the Authors

Daniel Lombard is a leading expert in property investment with over 35 years in the industry. As a key leader at Turningpoint Property Group and Assist Group, he specializes in impact-driven real estate solutions, helping investors build wealth while making a social impact.

Gerhard v Der Westhuizen is a Direct Real Estate Investment Officer at Wealth Assist, with over 30 years of experience in financial planning, property investment, and development. His expertise in impact investing makes him a trusted guide for investors navigating the real estate market.

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71

Property Management

Mastering Deposits: Tenants and Landlords

By Paul Stevens

One of the most contentious moments during a lease period is when the lease is terminated, and discussions around the return of the deposit begin. We delve into how the process is regulated and what tenants and landlords can do to avoid disappointment, stress, and anger.

Section 5 of the Rental Housing Act governs how deposits and interest earned are handled. The Act states that the landlord may require a tenant, before moving into the dwelling, to pay a deposit which may not exceed an amount specified in the agreement or otherwise agreed to between the parties.

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Essential insights for to avoid disputes

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Mastering Deposits

In practice, deposits often equal one month’s rent, but the specific amount can vary and must be agreed upon by both parties.

The deposit serves as financial protection for landlords, covering damages, unpaid rent, or other costs arising during the tenancy and stipulated in the lease agreement. For tenants, the deposit also serves as a motivator to maintain the property in good condition and fulfil their lease obligations. This dual purpose underpins the importance of transparency and clear communication between tenants and landlords.

The landlord or their managing property practitioner must hold the deposit in an interest-bearing account. Best practice is to hold the deposit in a dedicated trust account, independent of the business or landlord’s operating account.

Importantly, the interest rate must not be less than what a savings account with a financial institution would earn. If the landlord is a registered estate agent, the deposit must be handled in accordance with the Property Practitioners Act.

Tenants are entitled to request a receipt for their deposit payment, which should clearly outline the amount paid, the date, and the purpose of the payment. It is essential for tenants to keep this receipt as proof of payment throughout the tenancy.

What Can the Deposit Be Used For?

• The landlord is entitled to apply the deposit to specific costs which include:

• Reasonable repair costs for property damage caused by the tenant.

• Carpet cleaning and other cleaning services needed to restore the property to its original condition.

• Replacement of lost keys or other security items.

• Outstanding arrear rental or utilities owed by the tenant.

• Municipal charges, such as water and electricity.

• Advertising costs incurred for early termination of the lease.

• Commission owed to the property practitioner in the event of early termination.

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It is important to note that landlords are not permitted to use the deposit for general maintenance or routine upkeep of the property.

The deposit is strictly reserved for covering tenantcaused damage or outstanding obligations and can only be used once the lease agreement comes to an end, either by elapse of time or cancellation.

Inspection Timing and Best Practices

The Rental Housing Act requires both the tenant and landlord (or property practitioner) to attend an incoming and outgoing inspection. This joint inspection ensures that any damages are properly documented and distinguishes between pre-existing issues and tenant-caused damage.

For the outgoing inspection, it is recommended that it takes place as close to the lease’s expiration as possible and when the property is empty. An empty property allows for a thorough inspection, making it easier to identify potential defects. Tenants should ensure they participate in this process to avoid disputes later.

To further protect themselves, tenants should thoroughly document the condition of the property during inspections. Taking date-stamped photographs or videos is a valuable step, as is keeping a record of these documents. Ensuring that any concerns are included in the landlord or agent’s inspection report can prevent disagreements over the return of the deposit.

Proof of Interest and Expenses

Tenants are entitled to request written proof of the interest accrued on their deposit at any point during the lease. Landlords must provide this information, typically in the form of a letter from the financial institution where the deposit is held.

Similarly, tenants may also request receipts or documentation for any expenses deducted from the deposit. If no costs were incurred, the landlord must refund the deposit in full, along with the accrued interest, within seven days of the lease’s expiration date.

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Deposit Return Timelines

The timeline for deposit refunds depends on the condition of the property and the tenant’s involvement in the inspection process:

• If there are no damages or outstanding amounts, the deposit (plus interest) must be refunded within 7 days of the lease expiration.

• If there are damages to repair or outstanding amounts, the deposit must be refunded within 14 days after the restoration of the property.

• If the tenant fails to attend the outgoing inspection, the landlord must inspect the property within 7 days of lease expiration and refund the deposit within 21 days, regardless of repairs.

Legal Reference to Disputes

If any dispute arises regarding the deposit, tenants can escalate the matter to the Rental Housing Tribunal. Landlords are required to keep paid invoices as proof of repair costs, and tenants have the right to inspect these receipts upon request. This transparency is essential for resolving disagreements and ensuring fairness.

Protect Yourself

To safeguard their deposit, tenants should take several proactive measures throughout the tenancy, advises Stevens. “Carefully read and fully understand the lease agreement before signing it, ensuring you understand all terms related to the deposit and other responsibilities.

Do not miss either the incoming or outgoing inspections, and document the condition of the property with date-stamped photographs or videos.

Ensure that pre-existing issues are included in the landlord or agent’s inspection report to prevent disagreements at the end of your lease.

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When preparing to vacate the premises, tenants should keep receipts for any professional cleaning or maintenance services as proof of their efforts to return the property to the condition it was when they occupied it.

The most important thing to note is that open communication with the landlord or their managing agent is essential. Address any concerns or issues promptly and transparently.

It’s also a good idea to keep a record of all correspondence, including emails, letters and text messages, in case of a dispute down the line. These steps will help tenants ensure a smooth and fair process when it is time to reclaim their deposit.

Paul Stevens is the CEO of Just Property

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Technology

Cut through the ‘AI Business Value

By Saša Slankamenac,

According to Gartner, artificial intelligence (AI), and especially generative AI, has reached the peak of inflated expectations.

This means that early interest and publicity has created a “buzz” around the technology and our expectations around what the innovation can do exceed its current capabilities.

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Hype’ to unlock real

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While generative AI does appear to present many exciting opportunities, it’s easy to become fatigued by the relentless hype; especially if you’re one of the many businesses that has deployed AI with high hopes but haven’t achieved the results you were after.

• AI adoption should align with business needs and strategy, not just be a trend or part of the hype cycle.

• Striking a balance between AI efficiency and human oversight is crucial for sustainable, real-world value.

• Clean, usable data is essential for successful AI implementation; address data issues before deployment for optimal results.

But the problem with any kind of hype is that when everyone is talking about something, we tend to want to try it out so that we can be part of the conversation too. This isn’t necessarily a bad thing as long as the investments you make align with your business strategy and you have a clear roadmap that outlines how you’re going to use AI to reach broader business goals.

A balanced approach

It’s more important than ever to cut through the noise and adopt AI in a way that aligns with real business needs. AI should not be adopted just because it’s trendy. It should be deployed because it’s the right solution to address a specific problem. As such, it may be a better idea for you to channel your focus and budget to restructuring your existing databases or improving current processes because this offers better returns than an AI implementation.

In addition to this, when developing your AI strategy, it’s vital to remember that AI is not the only way to solve a problem. Your AI deployment should complement and not replace humans. During the industrial revolution, we saw new machines and new ways of

organising work transform entire industries, making them more productive and efficient.

But the machines didn’t take over entirely because the human touch is critical. With this in mind, modern businesses need to find a way to strike a happy balance between leveraging AI for efficiency, while also maintaining human oversight so that they can guarantee that the technology delivers real, sustainable value.

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This, in large part, comes down to having the necessary expertise to get the most out of AI; especially when dealing with legacy systems. If, for example, you get swept along by the AI hype but your company’s data landscape isn’t in great shape, you’re going to hit some roadblocks. Put simply, if you lack clean, usable data, AI won’t deliver the expected benefits. Before embarking on any AI implementation, be mindful of the fact that data quality has a massive impact on model performance. So, if you have data issues, these should be addressed upfront.

Right now, the challenge many businesses face is when to pull the trigger. While early adoption comes with higher upfront costs and greater risks, those that get involved early are the first to overcome the initial hurdles and really start experiencing the benefits of this new technology.

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Conversely, the businesses that hang back a little can draw on the experience of the early adopters; understanding how the innovation can be used to good effect and, just as importantly, where it adds little or no value.

Whatever you decide, it all comes down to implementing AI thoughtfully and with a clear plan in place so that you can realise the potential of this technology when the time is right. And always remember that AI is an enabler, not a solution in itself.

Saša Slankamenac is an Architect in the office of the CTO and AI lead at Dariel Software

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Technology

AI’s Future: Key Lessons DeepSeek R1 Release

By Eric Nienaber

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from the

Much has been written about the release of DeepSeek R1, and no doubt many fanatics have come across multiple articles on the topic.

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The Gist

• DeepSeek’s release of the open-source DeepSeek R1 offers similar capabilities to top models, developed at a fraction of the cost.

• AI is evolving rapidly, and as technology becomes more affordable, its applications will expand across various industries and regions.

• Businesses must adopt AI strategically, avoiding dependency on one model, and embracing flexibility for future advancements and cost competitiveness.

Here’s a ecap for those unfamiliar with it. DeepSeek is a Chinese artificial intelligence company founded in 2023 by Liang Wenfeng. Recently, they released an open-source large language model (LLM) called DeepSeek R1, which is comparable to some of OpenAI’s latest models but was developed at a fraction of the cost.

This development had significant impacts on financial markets, particularly on big tech stocks heavily invested in AI.

I suspect we will learn more about the R1 release as time passes, given that new findings continue to be made as people investigate it.

What has surprised me is the level of surprise this release generated in both governmental and financial circles. AI’s trajectory is unlikely to differ from other technological advancements, where new technology initially emerges as expensive and exclusive before becoming more affordable and capable over time.

Think about the physical size and processing power of early mainframe computers versus today’s laptops and mobile phones. Consider the early internet, its limited functionality, and slow connection speeds compared to today’s seamless and high-speed digital experiences. There is no doubt in my mind that AI will follow a similar trajectory, where costs decrease while model capabilities continue to expand.

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Another crucial point is that AI technology is still in its early stages, and it remains an incredibly competitive sector—not just from a business standpoint but also from a geopolitical perspective.

Governments worldwide view AI as a strategic asset with profound implications for global competitiveness. AI is not just a business tool; it will influence military applications, healthcare, education, social structures, and more.

Currently, much of the discussion focuses on the rivalry between the U.S. and China, but DeepSeek’s release suggests that AI dominance will not remain confined to these two nations. AI innovation is becoming more accessible across multiple regions and industries.

From a practical perspective, AI will become a critical component of business operations and will likely be integrated across all aspects of an organisation, including product development, operations, finance, legal, marketing, sales, staff onboarding, knowledge transfer, and training. While AI adoption may not happen across all areas simultaneously, selective implementation in the short term can provide businesses with a competitive edge.

The challenge in such a dynamic field, where numerous language models and AI-driven solutions are emerging, is finding the right path forward. From my perspective, it is essential that companies do not lock themselves into a single LLM ecosystem. The model that is optimal today may not be the best option tomorrow.

This is precisely why we have designed our AI solutions to be LLMagnostic, allowing businesses to switch the “brain” as needed. Additionally, cost competitiveness among AI models will continue to fluctuate, making it crucial for companies to avoid restrictive dependencies. I believe this is one of the key takeaways from the DeepSeek release.

There is no doubt that companies, regardless of industry or size, must embrace AI for the transformative benefits it will bring. If AI is not on your management agenda, not part of your strategic roadmap, and not included in your investment plans, now is the time to stop, reflect, and take decisive action.

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Commercial

High Street Auction hammer to unlock property economic challenges

By Shirley le Guern

Over 1 500 business shut down during 2024 – surprisingly, the lowest number in the past seven years, according to Stats SA.

It comes as no surprise that, up until recently, auction houses have been seen as the grim reapers or undertakers of the property business – but nothing could be further from the truth according to Greg Dart, executive director of The High Street Auction Company.

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Company: Lifting the value amidst

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As more and more businesses and individuals have been pushed to the brink of liquidation or insolvency by a stalling economy, the general attitude to business closures has switched from mourning to hope.

Business rescue has become the name of the recovery game and specialist property companies like High Street are now playing an important role in rapidly unlocking the true market value of property assets, freeing up much needed funds to put companies back on track whenever possible.

Bidding for business rescue

• Business closures in 2024 lowest in seven years, highlighting the shift from mourning to hope, with business rescue becoming key for recovery.

• High Street Auctions plays a pivotal role in business rescue by unlocking market value for distressed property assets, facilitating recovery efforts.

• Auction platforms evolve with online bidding and real-time strategies, offering transparency and global participation, maximizing asset value during liquidation.

High Street holds the record for two of the largest insolvency auctions in South Africa – the disposal of liquidated Kyalami Racetrack at R205-million and the R96-million Clifton Mansion – and it is as property professionals within the turnaround, restructuring and insolvency (TRI) space that the company feels it continues to make a positive mark.

“The work we are doing in the TRI space is echoed in our sponsorship of the Insolvency Practice Summit with the South African Restructuring and Insolvency Practitioners Association NPC (SARIPA) on 17 February as well as our upcoming auction on 27 February where we have six legal instructions for property on the auction floor.

Attorney, George Nell, a pioneer in the business rescue and restructuring industry will be the guest speaker at High Street’s auction, being a wonderful complement to the event given that we have a number of Insolvent Estates in the market on the day,” says Dart

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He believes a lot of water has passed under the insolvency bridge since the auction industry was seen as the purveyor of distressed sales and the hero of greedy investors on the hunt for a quick bargain at the expense of the distressed. Dart stressed that the auction platform unlocks optimum market value for assets, distressed or otherwise.

He acknowledges that South African companies continue to face economic pressures. Already, a protracted economic downturn, exacerbated by the Covid-19 pandemic and the energy crisis, has brought many to their knees in the commercial property space.

High unemployment and the work-from-home trend has deflated demand for commercial office space. Shrinking disposable income and growing household debt has resulted in residential foreclosures whilst lack of spending, competition from low cost imports and burgeoning input costs are just some of the factors that have eroded the industrial sector.

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Supply chain disruptions, lack of investment in technology and equipment, skills shortages and lack of service delivery are just some of the many issues that continue to dampen business confidence whilst the surge in online shopping and home deliveries together with high rentals in prime shopping locations have shaken the retail sector.

Yet, positives – including reduced interest rates and potential policy stability through the newly elected government of national unity – together with President Cyril Ramaphosa’s promised infrastructure roll out could point to the beginning of economic recovery.

Providing platforms for solutions Dart says High Street Auctions, which is active within the industrial, commercial, residential and agricultural sectors, is an important service provider within the TRI space.

“Modern day restructuring of insolvent companies requires a very unique skill set on the part of specialist practitioners. We are not those specialist practitioners, but rather are service providers to such practitioners, where we offer various advisory services either directly as our core business or through collaboration with corporate real estate services companies.

Auction is just one of the many platforms we offer for disposal of immovable assets that have to be sold as part of the liquidation process.

I’m very proud to say that we have played a meaningful role in helping reach workable solutions.”

Dart points out that the auction process itself has evolved significantly with the rise of online auctions, real time bidding and data driven strategies. The various platforms available through High Street include a multi property public auction platform, an online timed auction, a private inviteonly auction, private treaty and private bid options.

“Auctions provide a quick and definitive asset disposal which is crucial during liquidation of companies and for private asset disposal. There’s competitive bidding on the floor, not only highlighting true market value of assets but often even leading to higher returns. Our online platforms allow for global participation, increasing the pool of potential buyers. We’ve hosted bidders from Australia, Ireland and America,” he adds.

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According to Dart, transparency and fairness, the open planning process and regulatory oversight make auctions trustworthy and equitable. They provide a reliable, efficient, transparent method for price discovery and converting assets into cash, making them an attractive option for businesses in financial distress or simply wanting to restructure their portfolios.

His advice to those facing company closures, liquidations or insolvency is to trust the team of professionals who are there to assist: “Take a responsible position as an executive and look to the practitioners in the marketplace for assistance. They understand that the auction platform is a very, very viable tool to unlock value and to return liquidity to your balance sheet, helping you find the path to a healthier future, before it is too late to realise value.”

Find out more!

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Offshore

Invest in the U.S. with Confidence:

Why Investors Choose

CMB Regional Centers

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For over 25 years, CMB Regional Centers has been a leader in the EB-5 industry, providing investors a trusted pathway to permanent residency in the United States.

Founded by Patrick F. Hogan, CMB has built a reputation for delivering high-quality investment opportunities that are both financially promising and USCIS-compliant.

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It has been over 25 years since I first got involved with EB-5. I clearly remember how much time I spent in California researching how to utilize this new program that could benefit high unemployment regions of the state. In the beginning and before CMB, it was just me. I utilized employees from my other business to help with the day to day operations. In 1997, I established CMB Export, LLC, my first approved regional center under the EB-5 Program and has now grown to become CMB Regional Centers, which has been operating for over 25 years.

From the very beginning I envisioned how this program could benefit these communities across the United States and help hundreds, which is now thousands of families with their goal to immigrate to the United States. I knew these communities that were devastated by the military base closures, could benefit so much with the new job creation that would occur from EB-5 investment capital from overseas. What I did not imagine was the growth that CMB would experience between 1997 and today. I want to thank everyone that has trusted CMB and all that we do.

Patrick F. Hogan

Founder & CEO of CMB

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About CMB Regional Centers

To date, over 6,500 investor families from more than 100 countries, have partnered with CMB to secure their U.S. green cards. CMB has raised over $3.3 billion in EB-5 capital, financing more than 100 projects across 20 U.S. states, which are expected to generate 200,000 new American jobs.

What Sets CMB Apart?

1

Proven Track Record: CMB has successfully launched over 80 EB-5 offerings, with a 100% approval rate for projects that have undergone United States Citizenship and Immigration Services (USCIS) adjudication. This means every project CMB has brought to market has met the strict requirements of the EB-5 program, offering investors the highest likelihood of success in their immigration pursuits.

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Investor Security: Over $1.4 billion has been repaid to investors, as a testament to CMB’s financial discipline and commitment to investor protection.

3

High-Quality Investment Opportunities: CMB’s recent I-956F approval for the Group 93 – Coachella Valley project, in California, underscores the strength of their current projects on the market. With this approval, project investors are eligible for immediate USCIS adjudication of their conditional green card petitions.

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Proven Partnerships: CMB and Hillwood Development Company have cultivated one of the most successful lender-borrower relationships in the EB-5 industry.

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Benefits of EB-5

RESIDENCE FLEXIBILITY

Permanent residents of the United States are free to live anywhere in the country, without geographic restriction.

EMPLOYMENT FLEXIBILITY

Visa holders can work anywhere without an employer sponsor or start their own business anywhere within the U.S. 50 states and its territories.

TRAVEL PRIVILEGES

Visa holders have the ability to travel freely within the United States as well as in and out of the U.S. at any time.

PERMANENT STATUS

Visa holders don't need to reapply for a visa, just renew your green card every 10 years.

ACCESS TO FEDERAL PROGRAMS

Visa holders receive retirement benefits in the form of income after contributing to the Social Security Program, and ability to qualify for certain healthcare programs.

EDUCATION

Green card holders may attend U.S. schools at the same cost as citizens. The U.S. has some of the highest rated schools and universities in the world.

ACCESS TO HEALTHCARE

Visa holders gain access to the most advanced health care technology and services only available in the U.S.

PATH TO CITIZENSHIP

After 5 years of residency visa holders can apply for U.S. Citizenship.

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What is EB-5?

Established in 1990, the EB-5 Immigrant Investor Program, crafted by the U.S. Congress, facilitates lawful permanent residency for qualified foreign nationals. This is achieved by investing in the U.S. economy and creating a minimum of 10 full-time jobs. Administered by USCIS, the investment threshold is $1.05 million but can be reduced to $800,000 in targeted employment areas (TEAs), defined as rural or high unemployment areas.

In 1992, an enhancement to the EB-5 program emerged—the Regional Center Pilot Program. This addition allows private or public entities, known as Regional Centers, to pool investments for a more substantial economic impact. Regional Centers operate within specific geographic regions, such as cities, counties, or entire states, subject to approval by USCIS through a rigorous application process.

Distinguishing between the standard EB-5 program and the Regional Center Program, the latter employs economic modeling to assess indirect and induced job impacts tied to the capital contribution by each investor Regional Centers play a pivotal role by handling upfront due diligence, underwriting, and overall management throughout the investment and immigration process.

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CMB REGIONAL CENTERS

HISTORY OF SUCCESS

$1.4B

100%

CAPITAL RETURNED TO INVESTORS

PROJECT APPROVAL

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TOTAL EB-5 PROJECTS

2,700+

PERMANENT GREEN CARD APPROVALS

28

5,500+

CONDITIONAL GREEN CARD APPROVALS

YEARS OF EXPERIENCE

6,500+

INVESTOR FAMILIES

For those seeking a reliable, transparent, and successful EB-5 investment, CMB Regional Centers offers the expertise and infrastructure to make your U.S. immigration dream a reality.

With a proven track record, a solid portfolio of approved projects, and a commitment to fiduciary responsibility, CMB is the ideal partner to guide you through the EB-5 process with confidence.

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Current EB-5 Offerings

I-956F ED V O R P P A

$32.8M

$128.5M

814

98.5%

19.9

EB-5 Loan

Total Project Spending

Estimated Jobs from Development & Contruction

Job Creation Buffer

Job Per Investor

Undertaken in conjunction with Hillwood Development Company, CMB Group 93 – Coachella Valley includes the development and construction of an approximately 240-home community to meet demand for the flourishing build-to-rent residential market in the Palm Springs, California area.

Investors in this I-956F approved project qualify for High Unemployment setaside visas and are eligible for immediate USCIS adjudication of their conditional green card petitions.

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$44M

$95.4M

702

27.6%

12.8

EB-5 Loan

Total Project Spending

Estimated Jobs from Development & Contruction

Job Creation Buffer

Job Per Investor

Another collaboration with Hillwood Development Company, Commerce 71 will involve the development and construction of two Class-A industrial logistics facilities, a wastewater treatment facility, and associated infrastructure improvements required to complete the redevelopment of the site.

The project is located in the rapidly growing business hub of Columbus, the capital city of Ohio. The two-building development can accommodate up to 623,543 SF of industrial space in an advantageous, central location less than 10 minutes from downtown Columbus’ labor pool.

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CMB Regional Centers & Hillwood Development Company

CMB and Hillwood have cultivated one of the most successful lender-borrower relationships in the EB-5 industry – 40 EB-5 projects and $500 million repaid to investors.

GROUP 13

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GROUP 53

GROUP 42

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Wealth

Expropriation Act

A new era or the same old fault

By Simon Dippenaar

President Cyril Ramaphosa signed into law the muchdebated Expropriation Bill (now the Expropriation Act, 2025) on 20 January 2025. This legislative milestone marks the first update to the country’s expropriation framework since the apartheid-era Act of 1975.

Unsurprisingly, given its history, the Act is already headed for legal and political controversy. Expropriation is the taking of privately owned property by government (the expropriating authority) for the public good in return for “just and equitable” compensation.

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becomes Law:

lines?

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The Act has ignited debate across the political spectrum. The DA and Solidarity promise court challenges, while the EFF has branded the reform a “legislative cop-out”. DA Minister of Public Works and Infrastructure Dean Macpherson has stated there will be “no expropriation of private property on my watch,” sparking discord within the Cabinet.

Highlights:

Expropriation Act signed into law: The Act aims to modernise expropriation laws, aligning with constitutional principles while sparking legal and political debate.

Key features and potential issues: The Act allows “nil compensation” for certain properties but raises concerns over procedural contradictions and legal conflicts.

Opportunities for land reform: If implemented effectively, the Act could facilitate land redistribution, encourage investment, and support community development projects.

Will the Expropriation Act right historical wrongs while upholding constitutional values, or is it an unconstitutional framework doomed to cause more problems than it solves? We examine the controversies, opportunities, and societal implications of the Expropriation Act.

Protecting property rights

For many South Africans, “expropriation” invokes fears of blanket land seizures. However, well-crafted expropriation laws can stabilise property rights by making state interventions more transparent and rule bound. Countries like Germany and Canada have used the right of a government to expropriate private property for public use to encourage development while respecting individual rights.

Features of the new Act

The Act aims to align expropriation procedures with Section 25 of the Constitution, which requires “just and equitable” compensation. There are specific circumstances, such as abandoned or speculatively held land, where “nil compensation” may be just.

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Disputes can be referred to the courts for final determination. In principle, this ensures adherence to fair administrative procedures mandated by both the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and the Constitution.

Potential problems with the Act Despite these safeguards, top legal minds argue that certain sections— particularly Sections 7, 8, and 19—create procedural contradictions. Critics say these provisions create dual legal mechanisms, placing the administrative determination of “just and equitable” compensation in conflict with a court-driven process. The Act is intended to clarify expropriation, but it could wind up further complicating our land reform agenda.

This is also the first significant test of the GNU. The ANC has been developing this legislation for the past 10 years, and is now dependent on DA support, but the DA is opposed to nil compensation. Beyond the DA, there is broad political resistance. In addition to the EFF’s dismissal, the Freedom Front Plus accuses the Act of overreach; Solidarity has concerns about business confidence and property rights; and COSATU backs the Act as a tool to expedite land reform without inflated payouts.

Possible benefits of the Act If the Expropriation Act is implemented transparently and thoughtfully, it could facilitate land reform and accelerate transformation. The Act has the potential to activate idle assets. Large tracts of derelict or unused land could be repurposed for social housing and agricultural projects, revitalising local economies. 117

A workable framework could attract socially conscious investors and encourage public–private partnerships. It could even strengthen Ubuntu, which holds that community wellbeing and individual prosperity are intertwined. A fair expropriation mechanism could reflect Ubuntu by balancing historical redress with individual property rights.

Key points for landowners, investors and communities Property owners are understandably worried about the risk of arbitrary land seizure. It will hopefully reassure them to know that the Act ensures that expropriation serves a clear public purpose or interest.

Owners can challenge decisions or seek mediation under the law, consistent with PAJA and constitutional requirements for fair administrative action. However, litigation costs could rise if there are disputes over the interpretation of “nil compensation”.

For prospective buyers and investors, a robust expropriation regime could reduce unpredictability. Investors keen on projects with social impact may benefit if underutilised land is made available, provided the courts uphold the Act in a clear manner. However, legal action threatened by various political parties may place new land deals on hold.

For communities, an effective expropriation process could aid restitution and support community-based agricultural projects and social housing, provided processes are consistent with the Constitution and PAJA. Civil society must remain vigilant to ensure nil compensation is not misused.

Creating hope for the future The history of land ownership in South Africa is marked by dispossession, pain and a search for justice. The Expropriation Act 2025 has the potential to be a turning point for inclusive development, but it could also spark fresh legal and social conflict.

The Act’s acceptance and effectiveness will depend on integrity of application and the robustness of the judicial system in its enforcement. The Act will undoubtedly be tested in the courts. We will be watching avidly.

Further Reading on the Act: • Land Court Act • Major change in plans for land expropriation in South Africa • Expropriation Bill unconstitutional in the absence of a constitutional amendment • Expropriation Bill – Compensation, the Vexed Question

Simon Dippenaar is the founder of Simon Dippenaar & Associates, Inc. is a law firm of specialist eviction lawyers in Cape Town, Johannesburg and Durban.

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Events

Prosperity Enterprises Property Investors’ Evening

By Neale Petersen

The highly anticipated Prosperity Enterprises Property Investors’ place in Cape Town, bringing together seasoned and aspiring evening of expert insights, strategic discussions, and high-impact Hosted by Jaco Grobbelaar, Founder of Prosperity Enterprises, event provided attendees with the tools and connections to property investment journey.

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hosts a Power-Packed in Cape Town

Evening took investors for an networking. this exclusive elevate their

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EVENTS

An Evening of Expertise and Opportunity

The event kicked off with a warm welcome from Jaco Grobbelaar, who set the tone for an engaging and insightful evening. A key highlight was the presence of leading industry experts who shared their wealth of knowledge on a range of topics crucial to property investors.

Key presentations included:

• Neale Petersen (Real Estate Investor) – Success Strategies for Business Owners and Real Estate Investors

• Jed Kann (Lightstone) – Understanding Property Market Trends and Forecasting Growth Areas

• Marleze Moller (My Home Loans) – How to Secure Financing for Property Investments

• Jaco Grobbelaar (Prosperity Enterprises) – How Successful Property Investors Structure Their Portfolios & Scaling Your Property Portfolio for Sustainable Growth and Long-Term Wealth

• Robert Krautkrämer (Miltons Matsemela) – The Conveyancing Process and Legal Considerations in Real Estate Transactions

• David Beattie (Chorus Property Group) – Effective Property Management for Maximizing Rental Income

• Elize Le Roux (Xpello) – Maximizing ROI by Minimizing Risk: The Role of Legal Eviction Management

Real Estate Investment Insights from Industry Leaders One of the standout speakers of the evening was Neale Petersen, founder of Real Estate Investor Magazine, who captivated the audience with his expert analysis of success strategies for business owners and real estate investors. His session emphasised the importance of taking strategic action, leveraging data-driven decisions, and building long-term wealth through property investments.

Jed Kann from Lightstone provided key insights into property market trends and forecasting growth areas, helping investors make informed decisions backed by real estate data. Marleze Moller from My Home Loans took the audience through critical financing strategies, ensuring investors understood how to secure funding for multiple properties.

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Legal and risk management were also in the spotlight, with Robert Krautkrämer from Miltons Matsemela explaining the conveyancing process and the legal complexities of real estate transactions. Elize Le Roux, a leading expert in eviction law, shared valuable strategies for minimizing risk and protecting rental investments.

Scaling Property Portfolios with Confidence The final session by Jaco Grobbelaar focused on scaling property portfolios, emphasizing long-term wealth-building strategies. His in-depth presentation showcased how investors can structure their portfolios for maximum efficiency, leverage financing opportunities, and mitigate risk while expanding their holdings.

The Prosperity Enterprises Property Investors’ Evening was more than just a seminar—it was a transformative experience for investors looking to gain a competitive edge. With high-profile speakers, exclusive networking opportunities, and an engaging atmosphere, the event reinforced Cape Town’s position as a hub for property investment excellence. The next event takes place in Durban on Thursday 3 April 2025.

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Events

A Growing Market:

By Neale Petersen

The 3rd edition of the Hospitality Innovation Summit (HIS), held Marriott in Dubai, proved to be an outstanding success, further Africa’s growing prominence in the global hospitality market.

‍ Hosted by GBB with REI as strategic partner the summit brought key players from the hospitality, tourism, and investment sectors the evolving landscape of the African hotel industry and explore opportunities for global partnerships.

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Africa’s Hospitality Potential

at the JW cementing

together to discuss new

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EVENTS

Africa’s hospitality sector is poised for significant growth. With the hotel market in Africa expected to rise from US$12.10bn in 2024 to US$14.83bn by 2028, the continent is attracting substantial investment. The region boasts an impressive pipeline of over 92,000 rooms across 524 hotels in 41 countries, setting the stage for a thriving hospitality market.

‍

As the global tourism industry is projected to hit a staggering US$731.4bn by 2032, Africa is emerging as a key growth region. HIS Africa provides a vital platform for industry leaders, hotel owners, and project developers to connect with innovative solution providers from around the world. The summit enables valuable partnerships that are transforming the African hospitality landscape, providing a pathway for local and international brands to collaborate and grow.

REI’s Involvement: A Strategic Partnership Driving Change

‍Neale Petersen, from REI, a strategic partner of the summit, played a pivotal role in moderating the popular and highly anticipated panel discussion on

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Transforming African Hospitality with Global Partnerships

The session focused on critical aspects of hospitality development, including planning, designing, procuring, and developing hotels in Africa. It brought together a distinguished group of experts from diverse regions, including Ethiopia, Kenya, Nigeria, Dubai, and the Middle East, all united by a shared vision for the future of African hospitality.

‍The 3rd edition of the Hospitality Innovation Summit (HIS), held at the JW Marriott in Dubai, proved to be an outstanding success, further cementing Africa’s growing prominence in the global hospitality market.

‍Hosted by GBB with REI as strategic partner the summit brought together key players from the hospitality, tourism, and investment sectors to discuss the evolving landscape of the African hotel industry and explore new opportunities for global partnerships.

129

A Growing Market: Africa’s Hospitality Potential

Africa’s hospitality sector is poised for significant growth. With the hotel market in Africa expected to rise from US$12.10bn in 2024 to US$14.83bn by 2028, the continent is attracting substantial investment. The region boasts an impressive pipeline of over 92,000 rooms across 524 hotels in 41 countries, setting the stage for a thriving hospitality market.

‍As the global tourism industry is projected to hit a staggering US$731.4bn by 2032, Africa is emerging as a key growth region. HIS Africa provides a vital platform for industry leaders, hotel owners, and project developers to connect with innovative solution providers from around the world. The summit enables valuable partnerships that are transforming the African hospitality landscape, providing a pathway for local and international brands to collaborate and grow.

‍REI’s Involvement: A Strategic Partnership Driving Change

‍Neale Petersen, from REI, a strategic partner of the summit, played a pivotal role in moderating the popular and highly anticipated panel discussion on

130

REI MAGAZINE FEBRUARY 2025

Transforming African Hospitality with Global Partnerships

The session focused on critical aspects of hospitality development, including planning, designing, procuring, and developing hotels in Africa. It brought together a distinguished group of experts from diverse regions, including Ethiopia, Kenya, Nigeria, Dubai, and the Middle East, all united by a shared vision for the future of African hospitality.

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MARCH 2025

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