On Monday FNB released their second quarter Residential Property Barometer and it showed that 85% of sellers are not getting their asking price.
There are some sellers whom are starting to sell their properties at a loss just to get out of the market. I think that if you really can not afford your property you have to start considering your options. Do you still want to be able to buy property eventually? if yes you might have to cut your losses now, so you can get in to the game the next round, more educated and experienced.
I hate having to get rid of property because I believe in the buy-to-hold method of investing, but I will cut my losses to ensure I can invest tomorrow.
There are a couple of real estate investing gurus out in the market today that make a lot of money off people wanting to get into the property market. Make sure that you are not following blindly, make your own calculations and ask questions, hard questions. You will quickly find some of these gurus do not really have the answers and blame everybody else around them for their failed methods.
Stay positive, the market will turn again.
In the current market it is not a surprise to find people being scarde of the property market.
But I wonder how many people know that real estate doubles in value every 10 years. Does not matter in what market you buy it, it doubles every 10 years.
If you buy property now, you are building your wealth for the future, so don’t be afraid, find a way. If most of us got rid of our credit cards and short term debt,we’d be able to buy real estate and build wealth, but people are trapped by the “I want that lifestyle know” mentality. What will you do when you can’t affordthat lifestyle, or property anymore?
So I will stick to my guns and say: buy real estate now, it’s cheap, and it WILL make you rich, if you do your research.
Imagine you bought property when the interest rate was 25%, you’d be laughing at the current market because you would have had spectacular returns on your investment. So don’t make the same mistake twice, get into real estate and the next time the market is down, you will be the one smiling.
Now that the property market is falling, the banks don’t want to give 100% bonds anymore.
The current trend is as follows:
- If you borrow less than R750K you could still get a 100% bond.
- If you borrow between R750K and R2.5Mil you could get a 95% bond.
- If you borrow between R2.5Mil to R3,0Mil 90% bond.
- If you borrow between R3,0Mil and above 80% bond.
So if you want to get into the property market you will need a deposit. This could take time, so most people will rent a home. Property investors are happy about this because now their houses are being filled with tenants.
I still believe that real estate is one of the best investment vehicles over time, so I say save your money and pay your bond, not someone else’s.
It is no surprise that security complexes are very popular in South Africa. The reason for this is because of the crime.
Developers have picked up on that long ago and that is why we had so many complexes rise up from the ground. We could go as far to sy that they were spawned from crime.
This could how ever be an advantage for the real estate investor because these complexes are very popular rental units. people like to feel save, and who can blame them. The last thing a young family wants to do is worry about crime.
So next time you wonder which property to get as an investment, remember the complexes. As always do your research and you’ll do fine.
o yes, the property market is still in a slump, but at least we can buy properties at really reduced prices, it’s like there is a sale on at our favorite supermarket. Just don’t miss it, and do your homework.