How To Turn Your Home Into A Worthy Property Investment
Investing in South African property involves both challenges and opportunities. Luckily there’s a new course to help you maximise your property investment.
At House and Leisure, we obviously love a good house. But investing in property shouldn’t be a guessing game, which is why we think taking GetSmarter's Property Development and Investment online short course – which takes you through everything you need to know about getting onto the property ladder, as well as how to expand and make the most of your current property portfolio – is a good idea.
And best of all, House and Leisure readers now get R2000 off the course when going through our special GetSmarter portal. In the meantime, and to whet your appetite, here are a few things from the GetSmarter Property Development and Investment online short course that you can learn straight away.
How to turn your new home into a worthy property investment
According to the National Association of Realtors in the US, individuals aged 36 years and younger have accounted for the largest group of real-estate buyers over the last four years. Millennials overall remain the largest generation of buyers. The potential of a future income stream, paying off your own bond rather than someone else’s in monthly rent and the opportunity to gain financial independence all add to the allure of property investment.
Are you interested in investing in real estate?
For many, real estate is the easiest form of investment to understand and buy into. When you invest in real estate, you’re purchasing physical land or property. Investing in stocks, however, requires you to buy a piece of a company that entitles you to a share of its profit. Owning your own brick-and-mortar investment offers more control than reliance on the integrity and competence of a company’s managers and debtors. Overall, real-estate investment tends to be less volatile than the stock market, can yield high returns and can safeguard against inflation.
Investing in property in South Africa comes with its own unique challenges and opportunities. In order to take advantage of these, it’s important to have a solid grounding in the fundamentals of property investment.
How to identify a viable property investment opportunity
Whether you’re buying the latest homeware, a new car or a property, you’ll be on the lookout for the best quality at the best price. According to a report by real-estate education company FortuneBuilders, location and condition are two key factors in determining whether a home is a good purchase. While some properties may be worthy of a low price, others may require too much upkeep to justify their purchase price. In that case, your investment should boil down to location, location, location. If there’s no demand for a property’s location, your chance of appreciation is slim. Research an area thoroughly before investing.
Similarly, if something seems too good to be true, it probably is. Be cautious of buyers selling below the market value. If you’re looking for a fixer-upper, be wary of any hidden problems that may arise. While price matters, finding a property that can be overhauled with minimal effort is not as easy as Hollywood may suggest. Investing is always a risk, so bear that in mind.
How to ensure you’re on the right side of the law
Selling or buying a property will probably be one of the most significant financial transactions of your life. With it comes necessary legal implications: the duties, liabilities and processes associated with property ownership.
Should you be buying, fixing up or renting out a property, an understanding of your ownership rights is crucial. This includes property-law compliance and the consequences of noncompliance.
Properties need regular upkeep and maintenance, and although most renovations may be cosmetic, anything that poses a physical or legal risk needs to meet minimum safety requirements, regulated through compliance certificates as part of a property sale. This should be well established and assessed in the property’s conveyancing process.
How to get funding and financing for your investment
Once you’re ready to invest in your first property and potentially grow your investment portfolio, you’ll need to source suitable property funding. This can be done using traditional and nontraditional means.
Traditional: apply to banks for loans or lines of credit, or approach outside investors.
Nontraditional: these refer to private or non-bank loan funding, such as crowdfunding, selling assets, borrowing against the cash value of a life-insurance policy and taking out a second bond on a home or other property.
Gaining an understanding of traditional and nontraditional methods, and the motives of a lender and investor, can assist in the outcome of a loan application. To ensure the best chance of approval, write a funding application that is complete and well organised.
Investing in reward
According to PwC’s Emerging Trends in Real Estate 2018 global report, South African real estate is an exciting, ever-evolving industry. Purchasing real estate, managing it as an investment asset and developing a commercially viable property can provide financial success. When executed with the fundamentals in mind, property investment can yield long-term, sustainable returns for the investor.
Remember: Associated Media has partnered up with GetSmarter to help you explore the fundamentals of property investment in the Property Development and Investment online short course from the University of Cape Town (UCT). Guided by industry experts, you’ll learn the skills needed to become a property developer, make decisions on potential investment opportunities and set yourself up as a property entrepreneur.
Right now, all House and Leisure readers get R2000 off one of these online short courses by leading South African universities offered by GetSmarter.
Simply visit our special-offer page here to discover how to activate your discount – as well as read all about the full range of online short courses by leading SA institutions that are on offer.