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LANDLORDS NEED A GENTLE TOUCH WHEN IT COMES TO RENTAL INCREASES
1 24 FEBRUARY 2023 360 PROPERTY PICTURE: KINDEL MEDIAIG / PEXELS
PROPERTY ✦ INVESTING
‘The more you learn, the more you earn’
BEN MALAPILE started his property investment journey when he was 20 but his voyage did not begin with buying a property.
Rather, it started when he read a book that ignited his passion for business and investment; the book was Rich Dad, Poor Dad
“That book taught me about financial freedom, how to be financially literate, and to invest in income-generating assets such as property,” he says in an article that delves into the start of his journey.
When he was 21, Malapile registered his first company – a real estate investment firm, but it took him three years to buy his first property.
The feat was finally achieved on December 1, 2020, when he bought a distressed sectional title property that he fixed up in order to let out.
Less than a year later, he added a second property to his portfolio – one that, due to its location near a college campus, he turned into student accommodation.
Now, in 2023, the young investor’s portfolio is growing steadily.
the ropes and give you tips on what to look out for.”
EXTRA TIPS
If you are buying a property using a bond, then you must make sure you have a good credit score. You can check it for free on www.clearscore.co.za.
OTHER TIPS HE SHARES
✦ Get pre-qualified and know exactly what you qualify for before you start shopping.
✦ Make sure that you save some money for the one-off bond registration and transfer costs.
✦ If renovations are needed on the property, save some money for that too.
Once you know your credit score and buying power, you can start shopping. But, before making any offers, make sure that you run your numbers thoroughly.
“Remember, as a property investor, you buy with your calculator, not your heart.”
MAKE GOOD CHOICES
BY BONNY FOURIE bronwyn.fourie@inl.co.za“In 2021, when the year ended, I had four properties with a total of 16 tenants – five of them being students and the remainder being normal tenants. In 2022, I spent the year optimising the portfolio, tweaking a few things here and there, and also managed to add another property to the portfolio.
“Not only did the property double my portfolio value, but it added 10 more tenants to it, increasing the total number of tenants to 26.”
POSITIVES AND NEGATIVES
Malapile’s journey has, however, not always been smooth sailing, and he has learnt many valuable lessons along the way.
One of the negative factors, he says, is that, being a young landlord, tenants are often the same age or older than his parents. For this reason, it can be difficult to have tough conversations with them about rent.
The positives he has experienced include that some of his properties have grown by more than 20% in value within the first two years of purchasing them.
“Two years of bond repayments are done, and there are 18 more to go. When I get to my mid-forties, they will all be paid off.”
GET A GOOD MENTOR
If you are looking to follow in Malapile’s footsteps, he has some valuable advice to share.
One piece of wisdom is that if you are not comfortable collecting rent and having tough conversations with tenants, hire a property manager who is on top of their game.
He also warns that property investment can be “very punishing” when done wrong.
“If you don’t run your numbers thoroughly and know which type of properties to avoid, you could be buying properties that can cost you thousands on a monthly basis and cause you endless headaches. This is where having an experienced coach or mentor comes in handy. They show you
Malapile says Covid and lockdown showed us that no matter what happens in the world, people will always need a place to sleep. This bodes well for investing in residential properties. Commercial properties, however, took a big knock during Covid, especially on the office side of things. Workfrom-home trends have not made it any easier.
“With companies no longer requiring their staff to be at the office every day, commercial office spaces are no longer collecting as much revenue as they used to.”
With the current interest rate at 10.75%, coming from 7% two years ago, he says bond instalments have gone up drastically. This will push some homeowners to sell their current properties for smaller ones.
“Some will be forced to sell and consider renting rather than owning, thereby increasing the pool of renters and creating a demand for rental properties.”
He adds that the current interest rate also makes it harder for some properties to sell because the pool of buyers has decreased.
“This creates an opportunity for new investors to get bargains when buying property due to the smaller pool of buyers.”
There is an obstacle though, and this is that the interest rate could continue climbing.
“If new investors don’t budget for that upfront when they buy, they could be in for a nasty surprise after a few years.”
Furthermore, Malapile says some tenants are also struggling to make ends meet due to the rise in the cost of living, as well as recovering from Covid.
“As such, some tenants are either not paying their rent on time or not paying at all. Therefore, landlords and new investors must make sure that all potential tenants are screened thoroughly before accepting them as tenants. Evictions can be very costly and time consuming.”
GET EDUCATED
“The more you learn, the more you earn. Make sure that you educate yourself as much as you can before committing to an investment.”
Part of this, Malapile says, is getting a coach or mentor who has done what you intend to do.
2 24 FEBRUARY 2023
He may be young, but Ben Malapile is making great strides in the property investment arena.
It all started with a book and determination . At that stage, he had barely entered adulthood
A young property investor’s inspiring journey
Landlords should think twice before increasing rent
of
and
BY BONNY FOURIE bronwyn.fourie@inl.co.zaTENANTS are under financial pressure and landlords will have to be sensitive about the rents they charge if they do not want their properties to remain vacant.
Furthermore, the trend is expected to compound in future years as tenant income growth remains weak, unemployment levels remain, interest rates creep upwards, and inflation – particularly utility and municipal expenses – outpace rental escalations.
Price sensitivity will therefore remain top of the agenda for landlords and property managers in 2023, says Payprop deputy chief executive Michelle Dickens, explaining that there is a “mismatch” between inflation and affordability, which is impacted by rent escalation.
“Inflation has fallen back from its high but is still soaring at 7.2%. However, landlords are being
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left behind. Rental escalation was a mere 3.1% in August 2022 and dropped lower to 2.6% in September 2022.
“Landlords are now feeling the pressure thanks to the combined effects of increasing interest rates and low rental escalation.
“Added to that, property expenses like levies and municipal charges continue to increase at higher-than-inflation rates.”
While most tenants are receiving below-inflation rent increases, she says each interest rate hike has put tenant affordability under increasing pressure as their debt obligations to credit providers increase.
“The increasing cost of other essentials has also taken a bite out of tenants’ ability to pay rent.”
All this is putting downward pressure on rents, adds Johette Smuts, the head of data analytics at PayProp. The most recent PayProp State of the Rental Industry Survey
found that 85% of agents reported “moving to a more affordable property” as one of tenants’ top three reasons for moving, an increase from 58% last year.
“Prior to the Covid pandemic, South African tenants’ debt-toincome ratio hovered between 42% and 48%. The low interest rate cycle of 2020 and 2021 helped bring this ratio down to 37%, giving tenants the chance to save on interestrelated repayments.
“But as inflation started to rise in mid-2021, and interest rates did the same in November 2021, so too did the tenant debt-to-income ratio, which breached 48% by the beginning of 2022.”
This reinforces the overarching trend of affordability being the real driver behind the real estate market in 2023.
It is a bitter-sweet situation for landlords as, due to the interest rate increases, more aspiring buyers
will remain in the rental market.
Demand for rental properties will therefore be greater, says Nick Pearson, the chief executive of Tyson Properties.
“The rental market will become more buoyant with more people choosing to rent rather than buy. This is in marked contrast to an increase in the number of first-time homeowners when interest rates were low as more people could afford to pay back home loans.
“We did see an impact last year when interest rates went up and this will definitely happen again this year.”
Paul Stevens, the chief executive of Just Property, says there is increasing pressure on the real estate market from several directions, with both the rental and sales markets being impacted by rising interest rates, the cost of living and high levels of poor creditworthiness.
From a rental perspective, he says 50% of prospective tenants across the country are in some way credit impaired.
“This trend will continue through 2023, putting extended pressure on the rental market as the economy and consumers continue to be under pressure. Landlords will need to be realistic about the rentals they can charge, as rental inflation is expected to also be under pressure in the coming year.”
However, he says there are “great” investment opportunities in property, although you need to be clever about your purchases.
“Seek out municipalities that operate well, collect taxes and invest in infrastructure; find those that rally local businesses and communities to help provide manpower and advisory services –these will be the places to invest in now, so you can reap the rewards during good times and bad.”
DISCLAIMER: The publisher and editor of this magazine give no warranties, guarantees or assurances and make no representations regarding any goods or services advertised within this edition. Copyright ANA Publishing. All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from ANA Publishing. The publishers are not responsible for any unsolicited material.
Publisher Vasantha Angamuthu vasantha@africannewsagency.com Executive editor Vivian Warby vivian.warby@inl.co.za
Features Writer Bonny Fourie bronwyn.fourie@inl.co.za Design Kim Stone kim.stone@inl.co.za
3 24 FEBRUARY 2023
Tenants are struggling to afford the payments on the back
inflation
interest rate hikes , a situation that is expected to continue for a few yearsThe increasing cost of living has affected how much tenants can afford to pay. PICTURE: MART LMJ/PEXELS
4 24 FEBRUARY 2023 PICTURE: VICKY SIM / UNSPLASH TO ADVERTISE IN KWAZULU-NATAL Sherine Budhram 0 84 460 7295 sherine.budhram@inl.co.za Antoinette Gilbert 083 793 5382 TO ADVERTISE IN WESTERN CAPE Abigail Wilmot 083 212 1141 abigail.wilmot@inl.co.za antoinette.gilbert@inl.co.za TO ADVERTISE IN GAUTENG National Listings
5 24 FEBRUARY 2023
HOME MEETS HEAVEN
BOUTIQUE SECURE ESTATE IN CONSTANTIA UPPER.
Ensconced in the heavenly embrace of leafy Constantia Upper, Domaine Bordeaux offers secure estate living. With breath-taking mountain, forest and greenbelt views, the notion of home extends way beyond mere bricks and mortar. Here, life is truly immersive. This one-acre estate offers 3 beautifully designed contemporary residences, the gable architecture a geometric tool which guides the gaze, channelling sunlight while creating movement within each space. The texture of packed stone contrasted against sleek sheet metal cladding and smooth natural timber accents soothes the senses, ensuring the design echoes simplicity and functionality without being ordinary.
Steeped in heritage, legend and romance, the Constantia Valley and surrounds have long been the playground for royalty, celebrities, and sunseekers. Where in the world can you travel only minutes and experience such a wealth of diversity and depth of indulgence? Priced from R17.995 Million (VAT Incl. - No Transfer Duty).
Paul Upton +27 (0)71 610 8088 paul@dogongroup.com
6 24 FEBRUARY 2023 The depictions herein are for illustrative purposes only and are subject to change without notice.
HOME TRULY DOES MEET HEAVEN AT DOMAINE BORDEAUX.
FFC No: 0525859 CONSTANTIA UPPER - CAPE TOWN
7 24 FEBRUARY 2023 BEAUTIFUL BEACHFRONT APARTMENT Spacious open-plan living area leading onto open balcony with views of the Atlantic Ocean & Lion’s Head. 2 Bedrooms (m.e.s), undercover p/bay & excellent security SEA POINT - R5.45 MILLION JAMES 082 485 2702 KEAGAN 082 902 8202 Web Ref: RL12550 NEW RELEASE dogongroup.com A visionary company with decades of experience ALEXA HORNE 082 349 7799 SOUTHERN SUBURBS 021 671 0258 CONSTANTIA UPPER - R45 MILLION FULLY AUTOMATED PALATIAL FAMILY HOME - AN ENTERTAINER’S PARADISE This majestic SMART 7 bedroom home offers the ultimate in luxury living and the finest opulent details. Featuring a Tesla power wall, solar panels, borehole with water filtration system, central heating and air-conditioning throughout all controlled by the Control 4 home automated system. State-of-the-art security with touch screens connected to cameras can be found throughout this magnificent residence. This home is a must view EXCITING NEW RELEASE Web Ref: RL12544 WHAT DREAMS ARE MADE OF A beautiful 6 bed mansion in progress nestled on a hill in the centre of Van Riebeeckshof. This property will be a mansion of note when finally completed VAN RIEBEECKSHOF - R7.9 MILLION NADIA 061 256 0020 MATTHEW 083 645 4583 Web Ref: RL12551 IN THE HEART OF RONDEBOSCH This 2 bed apartment in sought-after Woodlands Park, is situated in the heart of Rondebosch. A lovely old-world apartment block. Close to good schools & shops RONDEBOSCH - R2.5 MILLION TESSA HUND 072 133 5576 Web Ref: RL12549 NEW RELEASE NEW RELEASE EXCLUSIVE
8 24 FEBRUARY 2023
9 24 FEBRUARY 2023
A RARE OPPORTUNITY NOT TO BE MISSED
This magnificent home sits high on our beautiful mountain at the edge of National Parks land and has uninterrupted views across False Bay towards Simon’s Town, the Hottentots Holland Mountains of Somerset West/Stellenbosh and South to Rooi Els as far as the eye can see.
Once you enter you almost have the feeling of being on board ship with every room boasting breathtaking views from every corner of the property.
PROPERTY DESCRIPTION:
TOP LEVEL: 1:
3 Garages with direct access double glazing, sliding doors and Euro style open in/tilt windows and doors for easy cleaning with lounge and dining view preserving Luxaflex Blinds.
Fantastic entertainers kitchen with views, Luxaflex Blinds, open in/tilt windows, easy access drawer and cupboard systems. Energy saving instant water heaters for kitchen and bathrooms.
3 phase energy supply to enable load balancing and instant water heating.
Beautifully appointed entrance, secure and side garden patio, lounge and dining areas with large balcony, 3 x 316 plate stainless steel pillars clad in ALU support sea facing beam. Low maintenance Rhein Zinc Eave cladding and gutter on main roof. Warranties on main and new garage roofing. Stainless steel recessed gutter on main roof feeds 2 x 6000 litre tanks in large level 3 store room, programmable water system.
LEVEL 2.
2 Bedrooms both with beautiful en suites, common balcony access and fabulous views. Ample cupboards. Carpeted bedroom areas..
LEVEL 3.
This level is office space with a separate bathroom at the moment but can be turned into an apartment with its own entrance or alternately another 2 bedrooms. Inside ALU American Shutters for security and comfort.
ASKING PRICE R7.25
MILLION
10 24 FEBRUARY 2023 PLEASE CONTACT AGENT FOR ALL VIEWING DEBBIE 073 140 2543 IRENE PORTER PROPERTIES
12 24 FEBRUARY 2023
13 24 FEBRUARY 2023 The Rules of Auction & CPA Regulations can be viewed at www.in2assets.com or at Unit 503, 5th Floor, Strauss Daly Place, 41 Richefond Circle, Ridgeside Office Park, Umhlanga Ridge. Bidders must register to bid and provide original proof of identity and residence on registration. The Rules of Auction contain the registration requirements if you intend to bid on behalf of another person or an entity. The above properties are subject to a reserve price and the sale by auction is subject to a right to bid by or on behalf of the owner or auctioneer. In terms of the POPI Act, our contact details have been stated in this document. By responding to such, you hereby opt in for future marketing communication via email, mobile and WhatsApp. Email optout@in2assets.com to be removed from all future communication. CONTACT US FOR MORE INFO: 0861 444 769 info@in2assets.com www.in2assets.com 063 500 1652 Auction Date & Time: 16 March 2023 | 11h00 | Auction Venue: Mount Edgecombe Country Club, Gate 2, 1 Golf Course Drive, Mount Edgecombe | Terms: R50 000 refundable registration deposit. Strictly by EFT. FICA Documents are required | Auctioneer: Andrew Miller 22 PROPERTIES ON AUCTION – 16 MARCH 2023 TENANTED COMMERCIAL UNIT Sections 1-4 Crystal Rock, 16 Solstice Road, Umhlanga Newtown Centre Total Extent: ± 960 m² | 26 Parking bays | Fully Tenanted | Gross Annual Income: ± R 3.3 Million ± 1 100 M² COMMERCIAL DEVELOPMENT SITE IN PROMINENT BUSINESS PARK Erf 2056 Shelly Beach Extent: ± 1 100 m² | Steel Structure and Architectural Plans for ± 400 m² Development included in the sale TENANTED MINI FACTORIES IN CORNUBIA Section 21 (Door 28) & Section 70 (Door 30) Micro Park, 26 Crassula Road, Cornubia Extents: Section 21: ± 143 m² | Section 70: ± 164 m² | 2 Exclusive use parking bays per section | 1 Exclusive use loading bay per section | Fully tenanted | Gross Annual Income: ± R458K 120 OPPORTUNITY RESIDENTIAL DEVELOPMENT SITE 11 Gevers Road, Assagay Extent: ± 7.8 Ha | Well located near Westown | Over 120 opportunities | Views of the Valley HIGH EXPOSURE COMMERCIAL BUILDING 110 Durban Road, Kariega (Uitenhage), Eastern Cape Extent: ± 1 306 m2 | GLA: ± 300 m2 COMMERCIAL & RETAIL BUILDING 1 Link Road, Gordons Bay, Western Cape Extent: ± 669 m2 | Prime corner position | Fantastic high exposure location | Huge passing trade | Currently income generating COMMERCIAL BUILDING & TOTE 69 Clarendon Street, Klipkop, Parow, Western Cape Extent: ± 892 m2 | High density residential area | Conversion opportunity | Ideal superette location INDUSTRIAL PROPERTY WITH HUGE EXPOSURE TO N2 FREEWAY 875 Peter Close, Springfield Park, Durban GBA: ± 3 200 m² | Month to month tenancy Potential for signage & branding companies for additional income to be earned | Gross Annual Income: ± R2.1 Million MINI FACTORY WITHIN SECURE INDUSTRIAL PARK Section 11 (Unit 8) SS Suffert Park, 7 Suffert Street, Pinetown Unit Extent: ± 430 m² | 3 x Secure Parking Bays | Height: ± 6.9 m | First Floor Unit with ramp access | Sold Vacant Occupation FLAGSHIP COMMERCIAL BUILDING 135 Musgrave Road, Musgrave Extent: ± 2 708 m² | Multi-Level commercial building | Blue chip tenants | High exposure position | Retail & commercial sections | Basement parking MEDICAL CENTRE 100 Peter Mokaba (Ridge) Road, Berea Combined Extent: ± 1 870m² | Fully let medical centre High exposure position | Gross Annual Income: ± R1.1 Million | Large recoveries | Solar panels | Huge parking SILVER OAKS BOUTIQUE HOTEL & CONFERENCE VENUE 17 Silverton Road, Musgrave Site Extent: ± 1 015 m² | 4 Star Boutique Hotel | 11 Bedrooms (Deluxe, executive & single rooms) | Superior fittings and fixtures | Conference Facilities for 50 people | Dining Area, Laundry facilities, Secure parking | Gross Annual Income: ± R1.2 Million | Sold with all movable assets 2 ADJACENT COMMERCIAL BUILDINGS 28 Swapo (Broadway) Road & 54 Balmoral Drive, Durban North Combined Extent: ± 2 048 m² 28 Swapo Road: ± 496 m² | 54 Balmoral Drive: ± 374 m² | Each Erf sold separately or combined | 45 Parking bays | Conversion opportunity | Fantastic location with huge exposure | Currently A Grade offices | 230 KVA Generator A-GRADE VERSATILE OFFICE & COMMERCIAL BUILDING 33 Umbilo Road, Congella Site Extent: ± 1 434 m² | GBA: ± 1 150 m² | Modern, well-maintained building offering various usage options | Can accommodate multiple tenants | 25 Parking bays | 2 x Gantry Cranes | Sold vacant occupation 2 X RETAIL UNITS WITHIN THE UMHLANGA GATEWAY PRECINCT Units 62 & 64 SS The Palms, Protea Hotel, 14 Palm Boulevard, Gateway, Umhlanga Unit 62 Extent: ± 60 m² | 1 x Secure parking bay | Sold vacant occupation | Unit 64 Extent: ± 28 m² | 1 x Secure parking bay | Sold vacant occupation GROUND FLOOR OFFICE SPACE IN LA LUCIA Section 1 La Lucia Park, 64 Armstrong Avenue, La Lucia Extent: ± 167 m² | 7 Individual Offices (Drywall) | Walk-in Safe | Male and Female Ablutions | Within walking distance to La Lucia | 200 m from the M4 Main Road POPULAR TOTE & COMMERCIAL PROPERTY 11 Pridley Road, Reservoir Hills Site Extent: ± 945 m² | GBA: ± 490 m² | 28 Parking bays | Off Track Tattersall operating for over 20 years | Option to Include Liquor & Gambling Licenses 4 BEDROOM PENTHOUSE Section 5 SS Ocean Glades, 83 Lagoon Drive, Umhlanga Rocks Extent: ± 514 m² | 4 Bedrooms | Pool & jacuzzi | Entertainers patio | Expansive ocean views | 2 x Double & 1 single garage | Direct access to the beach MIXED USE PROPERTY IN TONGAAT CBD 465 Gopalall Hurbans Road, Tongaat Extent: ± 2 065 m² | 5 x Retail Shops | 2 x 3 Bedroom Units | 3 x 2 Bedroom Units | Mostly Tenanted | Gross Annual Income: ± R634 K INDUSTRIAL INVESTMENT PROPERTY WITH LONG TERM LEASE IN PLACE 94 Columbine Place, Glen Anil Site Extent: ± 3 867 m² | GBA: ± 1 800 m² | Gross Annual Income: ± R 1.4 Million (Lease expires in 2028-7% Annual Escalation) | Can accommodate multiple tenants | Loading Docks into Warehouses | Power Supply: 440 AMPS ± 1 000 M² COMMERCIAL PROPERTY IN VERULAM CBD Sections 1, 2 & 3 SS Verulam Racing Centre, Todd Street, Verulam Extent: ± 1 842 m² | GBA ± 1 093 m² | Ample Onsite Parking (± 50 Parking Bays) | Positioned within the hub of Verulam CBD | Option to include Gambling and Liquor License MUHAMMAD | 079 458 4256 MUHAMMAD | 079 458 4256 MUHAMMAD | 079 458 4256 LUKE | 071 351 8138 LUKE | 071 351 8138 LUKE | 071 351 8138 LUKE | 071 351 8138 LUKE | 071 351 8138 LUKE | 071 351 8138 LUKE | 071 351 8138 LUKE | 071 351 8138 VIREND | 071 383 1735 LUKE | 071 351 8138 VIREND | 071 383 1735 VIREND | 071 383 1735 MUHAMMAD | 079 458 4256 VIREND | 071 383 1735 LUKE | 071 351 8138 MUHAMMAD | 079 458 4256 VIREND | 071 383 1735 MUHAMMAD | 079 458 4256 PORTFOLIO DISPOSAL PORTFOLIO DISPOSAL PORTFOLIO DISPOSAL
AGENTS’ DIRECTORY
DOGON GROUP PROPERTIES
Atlantic Seaboard Office 021 433 2580
thekings@dogongroup.com
www.dogongroup.com
RHONDA RAAD PROPERTIES
Cape Town Office 082 448 7795
Email: rrpsales@mweb.co.za
www.rhondaraadproperties.co.za
SHELLEY RESIDENTIAL
KZN
Office 082 412 4463
Email: hello@shelley.co.za
www.shelley.co.za
DOGON GROUP RENTALS
Sea Point Office 021 433 2580
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ASKA PROPERTY GROUP
Sandown, Milnerton Estates Office 071 604 8493
Email: corlia@aska.co.za
www.askaproperty.co.za
REMAX PROPERTY ASSOCIATES
Sandown, Milnerton Estates
Office 083 653 0595
Email: cristina@remaxpa.co.za
www.remaxpropertyassociates.co.za
DOGON GROUP PROPERTIES
Southern Suburbs, Claremont Office 021 671 0258
southernsuburbs@dogongroup.com
www.dogongroup.com
PETER MASKELL AUCTIONEERS
KZN
Office: 033 397 1190
Email: info@maskell.co.za
www.bidlive.maskell.co.za
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Ballito
Office 084 788 1020
Email: michelle@balwin.co.za
www.balwin.co.za
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Western Seaboard
Office: 021 556 5600 or 021 433 2580 enquiries@dogongroup.com www.dogongroup.com
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Gauteng Office 086 111 8267
www.vansauctions.co.za
www.iolproperty.co.za
WIDENHAM RETIREMENT
VILLAGE South Coast, KZN 066 306 0669 / 066 306 0612
www.hibiscusrv.co.za
www.widenhamretirementvillage.co.za
14 24 FEBRUARY 2023
PROPERTY 360
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