Who I am anyway

July 30, 2008

At the beginning of 2002, I started selling property in the peaceful oak-lined streets of Stellenbosch in a way that only a passionate and enthusiastic 24 year old could do. I was certain that I will become rich overnight. Man, was I wrong . . .

At the end of my first 5 months as a real estate agent, I haven't sold anything yet, was broke and down on my knees . . . I considered quitting, but I reasoned then that I didn't have much to lose, so I might as well stick it out for longer.

When I say I didn't have much to lose, I smile and think back of the liberty and wildness of heart going alongside with having only 3 items that I really valued: my back pack, my surfboard and a rather old second-hand bicycle.

Oh yes, I also had a bright red Mazda 323 with matching red surfboard racks and a mattress. And, if they could talk today they'd be able to tell some hilarious tales (my car died on me once, while clients were travelling with me, and I had to phone a friend to come pick us up and drop us at the property we were about to view!).

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The news - why should I bother?

November 21, 2008

I recently read an article from a gentleman who is about my age (I am 30 years young), who spends an immense portion of his year traveling the world, windsurfing and doing trips on his motor bike. His business is internet based and he periodically fine tunes it, from the weirdest places all across the globe!

It would seem that amidst troubling economic times his business is coining it and he is in fact using the economy that is "down" and riding that wave to create success. Let me cut to the chase. During one of his recent newsletters he made it public that he and his wife does not own a television and they do not listen to or read the news. In his mind there is currently no recession, no property bubble that is bursting and his bank is not running away with his money when they get bailed out.

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Answers to frequently asked questions
Click on a question below

  • Cash flow, cash flow, cash flow. I recommend that when you look at a property to buy, you take the worst-case scenario interest rate over the last 10 years and consider whether you'd be willing (and able) to pay the repayments on that bond easily for the payment term.

    In the South African economy that would be 25,5% (1999). Even if anyone guarantees the best capital growth it will be of no value to you should you not be able to service the bond and thereby lose the property and your good name.

  • No. If the history of property is taken however, over the long term, it usually does grow in value. The first consideration in our opinion still remains cash flow.

  • Besides a few exceptions, in most cases the answer is "yes". You will be taxed either on a capital gains tax basis or an income tax basis, depending on whether or not you would be deemed to trade in properties.

  • Yes. Our tax law makes a variety of structures available that can be used.

  • Market value is the price that a property would sell for when it is properly exposed to a sufficient number of buyers within a reasonable time frame. A reasonable time frame could be defined differently in various markets. We have found that period to be around 3 - 4 weeks in our market.

  • A variety of tools are used by most estate agencies to capture sales data that compare a specific property with similar properties in the same area that have been sold recently.

  • One of the best ways of paying less interest every month is plainly just to negotiate the best possible deal with the banks. Remember that a bank is a business and they are looking for more business. By working through a good bond originator, a better deal can be negotiated than an individual can get on his own.

  • A bond originator basically acts as an agent between the banks and the person applying for a home loan. Using a skilled originator means that you will get a better rate, because of the fact that banks are competing for your business.

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