The best investment you can make!
by Coert Coetzee, 26 June 2015
This week ABSA released their house price growth expectation for the next 12 months and, as always, I received many questions from concerned Treocians. They want to know if it is still worthwhile to keep their properties.
In short - yes, it is VERY WORTHWHILE! Here's why:
Let's take a look at the basics once again.
Anyone putting in a bit of effort can buy a house or apartment with a 10% deposit and 2% 'other costs' like bond registration and conveyancing fees. If you put enough effort in sourcing the property, you'll even find one producing enough rent to cover all monthly costs on the house. This means that a property of about R600 000 will cost you only R72 000. In other words, your investment is R72 000.
According to ABSA, the expected capital growth for the next 12 months will be 5%. Most people think this expectation is too low to make money - they think it's better to put their money on the stock exchange instead, at 20% growth, for example.
If the house's value grows at 5%, it is R30 000 return on your investment of R72 000 in the first year already! That means your investment grew at 41%, and Treocians can draw the R30 000 tax-free with our unique refinancing method if they want, without having to sell the house.
If your stock exchange investment grew at 20%, it is only R14 400 and you will have to sell the shares and pay tax on it if you want the cash.
So, to answer the question again - hold on to your house. It's always the best investment of your life. Rather buy more properties when the price growth slows down. We call it a "Buyer's Market"!
Just make sure you buy the right property in the right area. Never buy in a complex unless this sign is displayed on the premises.
Daar is deesdae baie kundiges en guru’s wat deur seminare of boeke vertel hoe om welvarend te word en passiewe inkomste te verdien.
Alhoewel ons die waarde daarvan nie vir een oomblik betwis nie, besef ons die frustrasie wat jy beleef wanneer die praktyk ‘n spul koue water oor jou entoesiasme gooi, nadat die teorie jou bruisend opgewonde gemaak het. Dan het jy boonop gehoor dat dit moontlik is om eiendom te kry waarvan die huur in staat is om jou paaiement te dek, maar al die beweerde briljante eiendomsbeleggings wat oor die e-pos of andersins by jou uitkom voldoen nie aan hierdie vereiste nie. Kort voor lank klink hierdie mooi geskilderde prentjie soos ‘n kammaland wat nie vir jou beskore is nie.
Ek práát egter nie net oor wat moontlik is nie, maar neem jou ‘n stap verder deur skitterende beleggingseiendom binne jou bereik te bring en jou welvaartbehoefte namens jou tot werklikheid te dryf. Ons is ‘n kopersagent vir die belegger wat die uitsonderlike opbrengspotensiaal van eiendom besef, maar verkies om nie sy/haar hande vuil te maak met die van dag tot dag bestuur nie.Ons bied ‘n eenstop diens van omvattende batebestuur (verhuring en instandhouding ingesluit), ongeag of jy om die draai of in die buiteland is.
Ons spesialiseer in eiendomme wat uitsonderlike goeie huuropbrengs lewer en/of substansieel onder markwaarde is. Alhoewel hart lê by koop-om-te-verhuur eiendomsbeleggings waardeur gepoog word om die eienaar sover as moontlik te bevry van paaiementsubsidiëring, is daar genoegsame geleenthede vir die spekulant wat ‘n eiendom vinnig (onder markwaarde) wil verkoop om ‘n stewige wins in sy sak te steek.
Ons grootste bevrediging is nie die ekstra finansiële voordeel wat beleggers vir ons inbring nie, maar die persoonlike verhouding wat ons met ons kliënte opbou en die terugvoer wanneer dit ‘n blywende positiewe verskil aan hulle lewens gemaak het.
Ons is nou ook betrokke in die buiteland, wat jou die geleentheid bied om buitelandse valuta te verdien, jou beskerm teen plaaslike risiko’s en selfs die moontlikheid bied van buitelandse burgerskap
One property at a time to financial freedom
Imagine having complete financial freedom.That means being able to sustain your chosen lifestyle – indefinitely – without having to work. Imagine no more.
Meeste ryk mense geld het maar nie tyd nie Meeste arm mense tyd het maar nie geld nie Die gewone mens nie tyd of geld het nie Ware rykdom beteken dat mens beide geld en tyd het. Dink net hoe dit sou voel om genoeg geld te he om jou gekose lewenstyl te handhaaf sonder dat jy ooit weer hoef te werk…
Finacial freedom is within reach of most ordinary salary earners if they invest smartly in buy-to-let property.
Zakkie is 25 years old and wants to start investing for his future. He has about R2 000 per month to invest or save. Rather than follow his parents’ example and put the money into a retirement fund or endowment policy, he buys an entry level flat valued at R400 000 instead.
He puts a tenant in the flat, receives a rental income of R3 000 per month, and pays a levy of R500 per month. This leaves him with a shortfall of around R2 000 p.m to cover the bond in the first year of his investment. He pays out of his own pocket – this is his monthly investment.
The following year he pays R2 000 plus a 5% escalation, as he would have done had he bought a normal retirement annuity. The tenant pays 10% more each year.
This creates a situation where the shortfall between the bond repayment and the rental paid by the tenant narrows every year until eventually, the shortfall is wiped out and Zakkie even makes a small profit. By ploughing the profit back into the bond repayment, along with his R2 000 per month, Zakkie is able to pay off the property in about 10 years, even if he had to do some maintenance and had trouble with tenants occasionally.
So by the age of 35 Zakkie has a fully paid off property giving him a net passive income of the equivalent of R2 500 per month in today’s terms. He then buys a second entry level property and uses the R2 500 income from the first property, plus the R2 000 from his own pocket, plus the new tenant’s R2 500 per month and he pays this property off in six years.
He continues this process and uses the income from the first two properties, his own R2 000 and the tenants’ money to pay off the third property in four years.
And so Zakkie benefits from the wonderful principle of compounding. As he applies this principle to property, each time the income from the previously paid off properties is used to pay off each new property.
The important thing to remember is that Zakkie is still only paying R2 000 plus 5% escalation per annum out of his own pocket – as he would have done had he taken out a normal retirement annuity.
If Zakkie continues to buy a new property every time the previous one is paid off, he will end up having 15 fully paid properties by the time he reaches the age of 65, earning the equivalent of R37 500 per month in rental income. In addition, in today’s terms his 15 properties are still valued at R400 000 each, which means he has R6 million worth of assets.
What would Zakkie`s situation have been if he had taken out a retirement annuity for R2 000 per month with a 5% annual escalation over a 40 year period?
If we keep to today’s time value of money, and assume an 8% inflation rate on average over the 40 year period, the annuity will produce about R850 000. That will produce an income for Zakkie of around R20 000 per month for three and a half years. That’s it! The money will then be depleted.
“Best of all for Zakkie is that his R37 500 rental income will keep up with inflation for as long as he lives. And when he dies, his heirs will keep on receiving this inflation-linked income for as long as they live, and thereafter their children for generation after generation,” his father Isak explains.
He points out, however, that the approach taken by Zakkie is extremely conservative. and is not necessarily the investment approach.
“There are much faster ways of creating financial freedom through property. But what this example clearly shows is that the returns on traditional investment products do not even remotely come close to those generated by property investment. In fact, the gap is so wide that one cannot even compare the two.
“In fact, it doesn’t make sense to ignore property as an extremely powerful wealth creating vehicle.”
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Property is a tangible asset - "an investment you can touch" - in a market that most investors know and understand. This gives a greater sense of control than leaving the responsibility for future financial provision to an anonymous fund manager in the City. The value of property can also be enhanced through changing or enhancing its features in some way. You also have the control of selling the property when you wish. The other upside and beneficial difference with this type of investment is that, it is an investment that everybody wants at some stage of their life but is not always able to get. The benefits of owning International property far outweigh other forms of investment.
More and more people are worried about their future financial security and what legacy they will leave to their children in these uncertain times as the value of their investments/pensions has plummeted. With the demise of final salary pension schemes, people are no longer guaranteed a comfortable income and therefore must depend on the value of their stock market-based investments which have fallen dramatically, and are consequently inadequate to support them in retirement
Here are a few facts on property statistics, which make compelling reading: Property has always represented a good and stable investment showing gains of 100% within 7-10 years. With compounded average annual increases of 8.5% since 1956. According to nation-wide figures, the worst fall in the property market was 11% back in 1990. In the 32 years since the Department of Records have kept statistics, prices have risen in 28 years and fallen in only four. According to the Office of National Statistics, rents have risen on average by 13% per annum since 1962. Property has outperformed the FTSE Share Index by up to 40% during the 12 months to March 2003. Inflation in the last 50 years has been 1,689% - the stock market has grown by 2,700%, but house prices have rocketed ahead by 22,000%. This figure encompasses all UK property. Property has been a consistent year-on-year out performer of stocks and shares. Whilst the number of households has increased by almost 50 per cent over the last 40 years, the number of people in the household is reducing. People are living longer and divorcing more frequently. There is also a greater trend towards single occupation - people preferring to live on their own, particularly in their youth and old age.
Property has become a recognised alternative / subsidy to under performing private pensions and savings plans. Property is vastly becoming the new pension. For those with the desire and foresight to get involved, buy-to-let property will provide not only a solid "pension" but also a passive income and a serious wealth generation vehicle. It is not hard to see that a sensible property investor will position him or her self to capitalise on these trends over the next decade and beyond. By utilising SURE HOLDINGS Property Investment's approach any property investor could stand to make significant profit, both from escalating house prices and the rental income from a steadily growing pool of renters. Do not be put off by scare stories that the market is going to crash. The fact is, history shows that there is no better place to invest your time, effort and money. No matter how the economy or stock market perform in the future, the growing population and the trend towards single dweller units will ensure that the long term demand for property will continue to grow for many years to come. Moreover, the profits in property will also grow with it.
Sound too good to be true? You could be a property investor!
It takes time to get used to the idea that you could give up the rat race - the daily commute, the office politics, the uneasy relationship with your boss, the constant pressure of corporate life and the month left at the end of your salary. But entertain, just for a moment, the idea that you could own your life and your time, so you can pursue your dreams...
What would you need to own 24 hours of each day, to use as you please? You would need passive income... enough passive income to replace your current salary, so you can maintain your current lifestyle.
Let's say you earn R35 000 per month at the moment. If the average buy-to-let property brings in a monthly rental of R3 500, you would need just 10 paid-up rental properties to replace your current income and maintain your current lifestyle for the rest of your life. Because just as your salary will increase (hopefully!) in line with inflation, so will the rental income from these properties increase in line with inflation each year.
So, if you had 10 fully paid-up rental properties today, you would no longer have to work and you could still maintain your current lifestyle. That would only be possible if you had bought 10 rental properties 10 years ago, because if you know how, you can pay off a bond in just 10 years.
So, if you want to retire in 10 years time, you need to get going - you need to start buying the number of buy-to-let properties you need to replace your current income today!
So what do you need? You don't need prior knowledge, qualifications or experience. You don't need much time, training or effort. You don't need a lump sum to invest or even a monthly investment that is more than your current retirement savings.
All you need is to implement a simple, proven system consisting of a few simple steps: Join the P3 Investment Group to learn how to invest in property the right way. Meet with your personal mentor to create your own personal Roadmap to Wealth. Set up a trust in which to buy your properties with the help of the trust experts at P3. Acquire a well-chosen property with the help of P3, who will deliver straight to your inbox a list of pre-screened, pre-selected properties and will help you get a bond. Get a rental management company referred by P3 to find and manage the tenant and to manage the property. Repeat steps 4 and 5 until you have acquired and paid off the number of properties you need to retire from the rat race, and then build as much wealth as you desire by simply repeating steps 4 and 5. If you are ready to become a property investor - knowing that it is not only possible, but also easy - simply click here right now for a free presentation that will show you exactly how property investment can help you get out of the rat race in just a few years.
Home » Why Property » Is It Worth It
The answer to this question will depend on your personal circumstances, what you hope to achieve by investing, and how much you can afford to spend. There is a vast spectrum of opportunities available within the property investment field, ranging from the ridiculously expensive to the nicely affordable, and with the help of SURE HOLDINGS, you should be able to find something suited to your tastes and pocket. Investing in a 'real' asset, as opposed to an intangible one can sometimes provide more stability, and property tends to hold its value better than other commodities. You do need to be aware that the overall liquidity and health of the property markets, and possible fluctuations in interest rates and inflation can affect the value of your investment, but generally it is highly possible to achieve a very healthy return. PROPERTY HAS MADE MORE MILLIONAIRES THAN ANY OTHER ASSET GENERATING VEHICLE.
Ever wished you had purchased multiple properties in the past and be retired if not semi-retired by now?
When is a good time to purchase property? If prices are increasing - YES If prices are static - YES If prices are decreasing - YES If prices are increasing - YES People prefer to buy in an upward market. Resulting in lower rental demand. Landlords then have to lower rental prices to get tenants. But still benefit from property growth. Top If prices are static - YES
This is comparable to a Mexican stand off, where no one is either buying or selling. This occurs when the markets are going to take a turn either way. No one is buying in case the market goes down & no one is selling in case the market goes up. They wait for someone else to make a move.
As the market is dormant you are not loosing either way. You are benefiting as some one else is still paying your mortgage and you are still getting an income. Top If prices are decreasing - YES
This occurs when there are no property buyers, and sellers have to ask a lower price in order to sell their property. As people prefer to rent for the time being until the market improves, landlords can demand a premium rate for rental of their properties. Resulting in a better income. This is probably considered the best time to buy, as the markets generally recover dramatically from a downward market. Top You maybe asking yourself, why is always a good time to purchase property? The answer is quite simple. Property is what they call a contra - cyclical investment, in other words you have the benefit of 2 sources of profit generating areas that combat one another if one is static or on a downward trend. Firstly you have property growth, and then you have rental returns. If one is decreasing the other increases.