When is a house repossessed?

Houses are repossessed by lending institutions such as South Africa’s major banks such as First National Bank (FNB), Absa, Nedbank and Standard Bank when people are unable to make the payments due on their home loans. When a home loan holder defaults on payments or is late making payments, the bank may apply for the person to lose their home as a result. If the motion is granted, the bank may then take the property into their possession and resell it to make up for any money lost.

What makes repossessed houses cheaper?

You can find some great deals on repossessed houses because the bank or lending institution is not concerned with making a profit; they just want to regain any money they have lost as soon as possible. Homes will generally sell for a price close to the amount still owing on the loan, and if the previous home owner was close to paying off the house, this price can be very low. Even if the home owner hasn’t paid in much towards the house, the house will still sell for a lower price than it would if sold privately or through a real estate agent. In this case, one man’s loss is certainly another man’s gain. Essentially, the previous home owner has already paid for some of the house for you, however big or small that portion may be.

One of the easiest ways to find and make an offer on repossessed houses in the Mitchells Plain area is to use online resources that list repossessed houses for sale and allow you to make an offer over the Internet.

One of the property listings on which to find repossessed houses is My Roof (www.myroof.co.za). My Roof is not an estate agent, but is a property listing company which uses the internet and other technologies to streamline their service and allow them to provide the listing service at a low rate. The listing includes various home repossessed by the major banks, listing the asking price and the address of the home.

The first step in buying a repossessed property online is to decide on the location, so once you have chosen Mitchell’s Plain, the next step is to decide on how much you are willing to spend. Once you have a set figure in mind you can begin to search for repossessed property in the Mitchells Plain area within that price range.

My Roof offers a number of services to help you find the right property:

• If you choose to sign up to property alerts, My Roof will keep you updated as new properties are listed on the website, sending you updates via email.
• You can track properties you are interested in on my website by using the “My Favourites” tool.  When you have selected interesting properties, you can add a pros and cons list to each to help you compare them.
• You can be sent email reminders of appointments you make to view properties.
• The team at My Roof will help you through the entire process of finding a property, making an offer, securing a bond and finally transferring the property to your name.

A simple internet search will reveal other companies dealing with the sale of repossessed house, one of them being Property Seekers (http://www.propertyseekers.co.za/).

An example of a repo house for sale in Mitchells Plain

There are a great variety of repossessed houses for sale in the Mitchells Plain area of different sizes, conditions and price ranges, here is an idea of a current house on sale so that you have an idea of a typical property you can expect.

• A two-bedroom, 1-bathroom house is selling for R170 000 on 26b Olifantshoek Street.

Repossessed Houses For Sale in the Mitchells Plain Area is an original post from: Property Investment Sales

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Property investments are no different to other investments – you need to do your research before you plunge into the property market. These days, there is a shortage of rental properties so if you choose the right kind of place you really can reap the rewards of your investments.

Here are 5 beginners’ tips for investing in property:

1.       Take the long way round

When it comes to property investment, it is best to take a long term view. People tend to forget that buying a property doesn’t only involve the cost of the actual building – you also have to budget for upfront costs such as legal fees, and stamp duty. Selling the property also involves costs such as the selling commission form the real estate agent, advertising costs, and capital tax gains. This means that to make profitable sale, the value of the property needs to grow beyond the 5-7% of the property value that will be spent on buying and selling expenses. To ensure that you make a profit, you need to strategize in the long term (at least 5 to 10 years) to allow the value of the house to increase enough to make you a profit.

2.       Choose the right property to invest in

Location, location, location! This is the most important criteria when you consider the success of your investment property. Choosing a good location gives you a better change to enjoy long term growth of capital and will attract quality tenants.

What makes for a good location?

• Good transport links
• Local amenities such as hospitals, leisure and shopping facilities, and schools.
• Construction projects and new developments in place.
• New infrastructure
• Suburbs experiencing population growth

Make sure that the type of building suits the area and the type of people who live in it.

3.       Choose a property that has tenant appeal

To maximize your rental return, you need to look for properties that have tenant appeal. A sitting duck of a property just costs you money, so you want the property to be popular with potential renters.

• Look for clean, secure homes
• Low maintenance outdoor areas
• Good airflow and light
• Plenty of storage space
• Off-street parking (preferably in a carport or garage)

4.       Get into negative gear

“Negative gearing” is an expression commonly used in property investment. To find an investment in property, most landlords need a home loan or some other kind of financing to be able to buy the property. This is where negative gearing can help you. Gearing refers to borrowing money to invest, like when you use a loan to buy an investment property so that you can afford to buy a property of greater value then you could with your own money. Negative gearing is when the cost of owning the property, paying off the loan and maintaining the property is greater than the rental income you are receiving. This difference counts as a loss that can be claimed as a tax deduction, reducing the tax payable on your income.

5.       Decide what kind of landlord you will be 

If you are a ‘hands on’ type of landlord, this means that you manage your investment property yourself. This does save money, but it also takes up a lot of time. You are also responsible for a number of legalities such as lease documents and attending to requests from tenants.

To avoid this extra administration, many landlords choose to hire a professional manager for the property to deal with the day to day running of the property. You will have to pay a fee for this service (usually a percentage of the rent amounting to around 7%). Be sure to choose an efficient and reliable property manager to do the job.

5 Beginners Tips for Investing in Property is an original post from: Property Investment Sales

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1. 3 Tips for Investing in Properties

What is a bond?

A bond is a kind of debt security, where you agree to pay back the money you borrowed with interest. Essentially, a bond is a kind of home loan. Bonds are usually issued out by credit institutions such as banks and other lenders if the potential customer meets the eligibility requirements.

If you are house-hunting, it is best to follow these 5 tips for a bond application to allow you an ultimate chance for success on your bond application:

1. 1.  Count up the costs

Buying a home is expensive, and not only for the actual bricks and mortar. There are a number of costs involved in purchasing a home, so it is important to come prepared to avoid unnecessary upset and a delay in your application process. Some charged to be aware of are; transfer duty, legal costs, bank charges, and a bond registration fee.

1. 2.  Clean up your credit

Most lending institutions will require you to have a good credit history before you apply to loan money from them. Particularly with the National Credit Act in place, it is important to check up on your credit slate to see that it is clean. If you don’t have a good history, there is a good chance you will be denied your loan application and will see your dream house signed off to another buyer.

If you have a poor credit history, you can rebuild it by making loan payments regularly and on time and becoming a responsible credit holder. This process may take some time, however, so if you do have a poor credit record you will usually need to wait a while and work on your credit rating before you become a bond-holder.

1. 3.  Dish out the documents

There are a number of documents that your bank or other lender will need before you can apply for a bond. Be sure that you meet the eligibility requirements and have your documents ready by doing research into what your lender will require.

Although all institutions many have slightly different criteria, some of the documents required by most bond originators include:

For self-employed applicants:

• A copy of your identification document
• A utility bill showing at least 3 months of payments
• An acknowledgement by SARS of your statements on monies owed and tax return, known as an IT 34 document.
• A statement of you earnings and gross profit for the past year or further in the form of a letter from your accountant.
• A personal bank statement of the last 3 months
• Your businesses’ bank statement from the last 3 months.

For applicants  employed by a company:

• A copy of your identification document
• A utility bill showing at least 3 months of payments
• A personal bank statement of the last 3 months
• Your tax number
• A letter of employment from your company
• Your most recent payslip

By preparing these documents before going to your bond originator you can save yourself a lot of time and may even be able to start your application on your first appointment. It is best to find out first from your particular institution the exact paperwork they will need so that you can get started right away.

1. 4.  Get your shopaholic on

Don’t just settle for the first lender that comes your way. As with most financial decisions, you should first shop around and investigate a variety of options to make sure that you are getting the best deal for your unique circumstances. If you are declined by the first lender you approach, don’t despair as you may still have a good shot with another institution.

1. 5.  The best of the bond originators

Use a reputable bond originator as they will be able to assist you to negotiate with major lenders on your behalf. They will also be able to give you feedback on  the progress of your application.

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What are the benefits of investing in offices and warehouses?

Commercial property such as office and warehouse space presents investors with the opportunity to earn substantial profits, largely because it is more affordable for a business to lease or rent a commercial location rather than buy it. Other advantages include:

• Office and warehouse property investments often allow for long leases with high rent.
• The maintenance of commercial properties is usually more professional, leaving the leaser with fewer expenses.
• A high return on investment (often more than 8 or 9%).
• In prime locations, rent can be increased by 3% or 4% per year, guaranteeing higher future returns.
• Office and warehouse space in prime locations will always be in demand. This means that you can count on good resale value in the future.

Tips for investing in office and warehouse property

As they say in the property business, “location, location, location” is everything when it comes to making an investment in the commercial property market. Put yourself in the position of a business owner looking for an office space or warehouse: you want to have all the resources and amenities you need close at hand. To find the right kind of location, you need to conduct significant market research to find properties that best suit the bill. This will involve some communication with relevant real estate agents who can use their databases to help you. Investing in a prime office or warehouse location means that the property will always be in demand and your investment is likely to be a profitable one.

Before you start looking for properties, however, you need to decide on how much you are willing to spend as this will limit your choices and help you to refine your search.

Once you have found a number of suitable properties within your budget, you need to do the math. Compare the asking price against the returns you expect through lease (be sure to minus the costs of maintenance and taxation). If you are buying the property with a mortgage loan, you will need to factor in the loan instalments. If the property shows favourable returns then you should consider buying it.

To make a successful investment choice, you need to take into consideration the metropolitan location, micro-location and product type.

In terms of the metropolitan considerations, selection of area should take into account the actual location as well as the location’s potential for rental growth. The office or warehouse you choose to invest in should not necessarily be in the most prominent current location, but potential for development of the area needs to be taken into consideration.

Trends indicate that metropolitan areas that are or are developing into distribution hubs for the region are favoured by businesses, as businesses are looking for more efficient and cost effective ways to manage their inventories.

When it comes to micro-location considerations, look at factors such as proximity to freeways, airports, and density of consumer, labour and manufacturing concentrations. Industrial park locations have also become attractive investment options and access to worker amenities such as public transport, restaurants and other facilities is also a plus.
The final consideration is the type of product and the target market of your renters. Highly competitive and well-established firms will usually be the most demanding of the warehouse or office space and will usually require the best technologies and operations. On the other hand, evolving firms may not necessarily need high tech warehouse or office solutions, but will rather focus on the functionality of the space and what it can do for them.

For a real estate broker that specialises in office and warehouse properties in Gauteng, try RCP Brokers, who have over 3000 spaces available in the Gauteng region.

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Investing in property has become a popular long-term investment option because of the relative risk-free investment environment. Nowadays, many investors are choosing property over shares and stocks for long-term investment, and other have recognized the advantage of the property market as an alternative to pension schemes.

Investment property can serve as property to let or as a second home for prospective buyers. With South Africa’s peninsula shape and coastal stretches, there are many beautiful locations for prime property investment opportunities. There are many advantages of investing in South African property, as you can use the rent from your tenants to cover the bond, or have an exquisite holiday home to escape to.

What about foreign investment?

With its growing internal market conditions, South Africa presents favourable terms for foreign property investors. The International Property Investment Network (IPIN) allows members of the network to take a look at selected South African properties on the market. The IPIN works with a network of property developers, real estate agents and landowners to forge connections and contacts and find the best options for potential property buyers.

The network can also help property investors who wish to invest in a joint property development venture with other relevant parties. The South Africa investment research section on the IPIN website provides further reasons why South Africa makes hot property, including both favourable climate and lifestyle. Foreign investors will also find that newly regenerated areas and city projects can offer excellent returns. Compared with the rest of the world, investment property is still cheaper in South Africa than it is in other parts of the world.

Why South Africa?

With a great number of both cultural and natural factors to choose South Africa as a property investment option, a more appropriate question would be: “Why not South Africa”?

SA investment properties can boast the following cultural and natural advantages:

• The large size and peninsula shape of the country means that there is a long coastline offering itself to property development and investment opportunities.
• The diversity of climate and landscape means that property developers are able to choose a particular setting that they enjoy for their property investment purposes.
• South Africa has some of the best year round climactic conditions in the world, making the country a great holiday destination, no matter the season. It also means that there are a number of outdoor activities that can be enjoyed among the diverse landscape.
• With a diverse population, South Africa is home to a number of different cultural groups, the interesting influences of which can be seen countrywide.
• Many regions in South African are home to wildlife parks, where you have the opportunity to seeing indigenous animals in their natural habitats.
• There are 11 official languages in South Africa, but many people can speak English as a second language. Property transactions will be conducted in English, removing any language barrier issues.

Investing in South African property also has a number of economic advantages.

• With the low exchange rate between the South African currency (Rand) and other major currencies such as the Dollar, the Sterling and the Euro, property purchasers are able to take advantage if this exchange rate and get more for their money.
• Taxation breaks of as high as 20% are offered for real estate developers and for renovation projects, developers can take a rent tax break of 20% for 5 years.
• Even amid unfavourable worldwide economic conditions, the property market in many areas is continually growing in the developing country.
• In terms of commercial property, the South African market is performing better than the commercial property market in many developed Western countries.
• In some areas there is a shortage of housing, meaning that rental properties are in demand.
• Because the majority of South Africans are not high earning, there is less competition in the property market between buyers.

SA Investment Properties is an original post from: Property Investment Sales

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1. Property Investment Strategies for South Africans

The banks apparently prefer this type of arrangement instead of suretyships under which banks can recover debt in cases of default, but normally with great difficulty.  As a result, applying for a joint mortgage is smiled upon by the banks due to the fact that more than one person is liable for the debt.  Absa is one bank that prefers this type of bond and as a result has no limit to the number of people who take out the bond jointly.

One of the prime markets for co-ownership is the first time buyer market, as well as investor groups.  The reason this is so appealing to these markets is due to the fact that the risk is spread. One of the main areas that this type of purchasing is on the increase is in holiday home purchasing.  As we only spend a certain amount of time in our holiday homes, then it makes sense to share the cost of the home that you are purchasing.

Another option where co-ownership is something that you should think about is when you are looking to purchase a property as an investment to rent out to someone.  This way, should anything happen to the property whilst the tenant is in it; you and your co-owners are all liable.

However, there are a number of factors that you should consider before deciding that it is a good idea to have a joint mortgage bond with friends and family.

First, all partners have to be in agreement with the co-ownership and who gets what percentage.  This is imperative as there will be a number of costs involved such as rental patterns, rates and taxes, insurance, and so on.  It is therefore imperative that you go in to the venture with a watertight contract in order to safeguard all of the parties involved.  This contract also needs to cover issues such as the death of a co-owner; the defaulting of a co-owner, and any other information that you feel that needs be covered by the contract.

One solution to the horrible situation where one of the co-owner dies is to ensure that all of the partners have life policies with linked beneficiaries.  Therefore their share of the ownership will be covered in the event of their death.  Another issue that needs to be agreed upon is how a partner exits the co-ownership should they wish to.  Absa stresses that in any co-ownership mortgage, if one or more partners want out, then the loan has to be reevaluated.

Co-ownership is not something that should be entered in to lightly, especially with friends or family. As mentioned above, there needs to be a water-tight contract that everyone agrees to whole-heartedly in order to ensure that there is no bad blood shed between you and your family/friends. Although co-ownership has many benefits, the downfalls may not be worth it should you enter in to the contract with any doubts whatsoever. This is not something that should be entered in to without great consideration and advise from the financial institution who is offering the loan.

It is also necessary to get a lawyer involved in order to ensure that you have a contract that you all agreed upon. You also need to decide if you are willing to risk your friendship or relationship or if you think it will be strong enough to withstand any pressures that may occur as a result of the co-ownership.

Is it a good idea to have a Joint Mortgage bond with Friends or Family? is an original post from: Property Investment Sales

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1. Is Investing in Property a Good Idea Right Now?

You can find properties that are being sold for well below market value due to the fact that these houses or apartments have been repossessed by the banks. This has occurred because the previous owners of the property have fallen back on their bond repayments. Although it might seem a little callous to purchase someone’s home that they did not want to leave, it does present a great opportunity for you to find the perfect home, in the perfect area, without having to spend a fortune.

If you are looking for Gauteng repossessed houses up for sale, then there are three phases during which one of these properties can be purchased: Distressed sale, Sale in Execution, and Properties in Possession. However, in order to fully understand what each of the above phases mean, you need to be able to understand how property repossession works.

Firstly, repossession can only occur if an individual known to the banks as a borrower (meaning that they have taken out a home loan with the bank), has defaulted on their repayments of the loan (or bond) to the extent where the only way to recover the money owing, is to repossess the property. From here, the banks have to get their attorney’s to apply for a judgement against the borrower in the local magistrates court. Should the borrower not be able to pay back the money owing by the time that this occurs, then the magistrate will allow the bank to seize the home owners moveable assets (i.e. their car, their appliances etc) in order to get the money back.

Should the sale of the borrowers moveable assets not amount to enough money to cover what is owing to the banks then the property will be auctioned in what is known as a Sale in Execution. However, should the owner of the property try to sell the property themselves in order to make back the money owing, then this is considered to be what is know as a Distressed Sale. Should the borrower or the bank not be able to meet the reserve price set on the property, then the bank can buy back the property and it is then referred to as a Property in Possession or a repossessed property.

Unfortunately due to the economic recession, more and more houses are becoming properties of the banks once again. This means that you can find a list of Absa, Nedbank, Standard Bank, Wesbank properties that have been repossessed almost anywhere. Many of the weekend newspapers that have property sections list the homes that have been repossessed and put up for auction. You may be wondering what the other benefits are of purchasing a repossessed home, other than reduce prices. Well, in most cases you do not have to pay a transfer fee. This will save you a lot of money as this is normally one of the priciest things when purchasing a home.

The chances that finance will be approved by the banks in order to purchase one of these properties is higher than if you were looking to purchase normal house for sale. This is because the banks need to make back the money owing to them and quickly. Lastly, should the house be in a state of disrepair, then you can often negotiate the price. This can therefore be a property developers dream.

Gauteng Repossessed Houses up for Sale is an original post from: Property Investment Sales

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1. Repossessed Houses in Gauteng, Cape Town and Durban
2. Houses Repossessed by Banks in Gauteng and Cape Town
3. Gauteng Houses For Sale at Auctions

With the recession that occurred in 2008, where many people lost their jobs, many estates were declared insolvent as a result of a loss of income. As heart breaking as this may be for the persons whose estate has been taken by the bank, it presents a fantastic opportunity for property investors. The reason being that the banks need to make back their money on any outstanding debt whether it be vehicle or home loan debt and as a result they place the sellable items of the estate on auction.

This is a great way to find properties that would normally have been sold at much higher prices, at a great price. Although insolvent estate investments may seem a little harsh, the reality is that the banks need to make their money back and they do provide a time frame in which the current occupants can try and find a solution in order to save their estates. Should they however not be able to, then the properties go on auction. There are however a few conditions that need to be raised before you go off and start bidding to your heart’s content on these properties.

Firstly, if the property in question is being sold between the amounts of R1 and R750 000, you are required to pay a ten percent deposit in to the trust account of the trustee of the estate. Should the bank be named the trustee then you are required to pay this deposit to the account of the bank trustee before you can obtain the property. Should the price of the property be more than R750 000 then you are only required to pay a five percent deposit. Another factor to consider is that all properties are sold “as is” which means that should you purchase a property and find a fault, for example a serious electrical fault, then the onus is with you and not the bank to fix the problem. This means that the purchasing of properties on auction can be a lot riskier than if you go through an estate agent.

It is also important to note that should you wish to move in to the property as soon as possible, you need to speak to the trustee of the property and determine if you are required to pay occupational rent. FNB will charge you one percent per month on the purchase price which means should you have purchased a property for R750,000, you would pay R7500 per month on occupational rent. This can become quite expensive in the long run should you have to wait for an extended period for the sales agreement to go through. As the sales agreement has to be approved by the Master of the Supreme Court, this could take months.

If you are interested in investing in an insolvent estate then the best thing to do would be to consult your personal banker, should you have one, and discuss exactly what is involved. Insolvent estate investments are not as clean cut as one may think and therefore it is also a good idea to seek legal advice so that you do not end up getting ripped off when you thought you would be saving money.

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1. Check the sales figures of other properties in the area
2. Talk to as many agents as you can in order to get a clearer picture of what you can be expected to pay
3. Scour the available newspapers with property sections to again check what other properties in the area are going for
4. If you are looking to purchase a sectional title unit, then you need to investigate the managing agent and ensure that you get your hands on a copy of the schemes accounts

Greef further explains if you are using your own bond as a tool through which to purchase your investment property that you would be jeopardising your own home if you do not put in the man hours to ensure that you are making a sound investment.

Another industry expert, Tony Clarke, the MD of Rawson Properties explained unwaveringly in a recent press release that property investment is always a good move and that he believes that now is one of the best times to buy property as he explains that “many underdeveloped erven are attracting offers of no more than 33% of their current value while improved properties are often being bid for at 60% or less of their market value.” Clarke did however mention that it is important that you do not get in to the property investment market thinking that it will provide you with a quick return. Another factor that Clarke believes is driving investment in to this arena is the fact that more and more people are renting due to a shortage of home loans being granted by the banks. Therefore it means that there will never be a shortage of income for you if you invest in the right property.

Clarke additionally explains that it is also easy to get in to this type of investment as the skills needed to make it in this property playground can be acquired with very little effort.  I think this clearly shows that the answer to the question – is investing in property a good idea right now? – is most definitely yes.

For those of you who are interested in the property market but feel like it may be out of league you can start off small. For example you could buy a small flat in a decent area and remodel in order to increase its value. For those of you who are looking for something a little more challenging, why not purchase properties in a less conventional area. By doing so you can get properties at really great prices and if you do it properly you could end up enhancing the property value of an entire area if you can buy up enough properties.

The property market however is one that is open to change and like an investment it will come with its peaks and lows, you just need to determine if it is the investment playground that you want to play in. It is a hell of a lot safer than the stock market and a recent study showed that 35% of the world wealthiest people invested in property over stock investments (17%) because of the safety associated with this type of investment.

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What is even better is that in the last few years, there has been an increasing growth in different types of businesses which normally start out of homes. However once these companies grow and expand, they will need industrial property.

If you are looking to make an industrial property investment then you need to know about the different ways of purchasing forms. Firstly there is directly held which is the most widely form of ownership as property can be purchased vacant or with tenants.

Secondly there is listed property funds and this is a more liquid form of property holding. However this type of ownership is more susceptible to fluctuations of the stock market. Lastly syndications offer part ownership in some properties however investors are cautioned to make sure that you know everything about the syndication before agreeing to anything as there are some suspicious companies operating in South Africa.

If you are interested in investing in industrial property but are unsure of how to find the best properties then here are some tips.

• Determine a broad location where you want to invest and consult with property brokers specializing in the area.
• Discuss what they think might suit your needs best and then go and view the properties. It is always best to determine what state the properties are in both physically and financially.
• You also need to investigate the town planning conditions and zoning certificates of the properties in question as you do not want any hidden surprises.

It is generally also a good idea to find out the background of the seller and find out why they are selling before you consider delving in to industrial property investments.

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