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You actually don’t want a bond when buying

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Ideally you should always buy property cash.

Yes, I realise that it’s not realistic but that should be your aim.

In my mind, it would be better to borrow the money from your friends than have a bond.

While we all know that there are costs for transferring a property into your name, few people know that there are bond costs too, which essentially doubles the cost of putting property into your name.

Taking a 100 percent bond increases the risk of the bank lending you the money, so they tend to charge you maximum rates while if you were to put down a reasonable 20 percent bond you would get at least one percent lower bond rate.

Your bond costs would also be lower because they are based on the value of the bond that you take out.

My three aims would be to:

  • Pay off my bond as quickly as possible and if I had a 100 percent loan, renegotiate for a lower interest rate when my bond goes down to 80 percent of the original loan.
  • Pay extra off my bond every month to bring it down more quickly. Make it a bond to always get your balance down as much as possible. Remember paying an extra R100 pm month means that your bond balance has come down by R1 200 per annum. Not much hey, but it actually is more than that because you will be paying less interest each month, about R7 per month but it all accumulates. Try R200 per month.
  • Pay 10 percent of my annual increase of my bond. You won’t notice it but your bond will. If you are being paid R12 000 per month and get a 10 percent increase, you would pay off R120 per month more off your bond. That would double the extra that you are paying off each year. Alternatively, pay 10 percent off any bonus that I get. An extra R120 for the month. Not much but it really makes a difference.

Your aim should be to be bond-free.

Do you think that there is a difference in the lifestyle of a person that owns his or her own home bond-free and the one that has a R1 million outstanding bond?

The first has an extra R7 500 per month tax fee to spend and peace of mind.

Just following these simple rules could halve the time that it takes you to pay off your bond. Worth every penny.

  • Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.

Property

Gas it out, give Eskom the boot

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ALTERNATIVE SOLUTION . . . Gas can be used for heating water, ovens and stoves in general

Electricity has simply become unaffordable. And, as if that’s not enough, it’s not always available.

In recent months, the power utility has been churning out media statements explaining the loss of generation at various power stations and pleading with consumers to use electricity sparingly.

While the updates are important, consumers naturally expect electricity to be available whenever they turn on the switch.

The recent tariff hike of over seven percent in Mangaung Metro has proved quite steep to most households and it might not be far-fetched to expect another round of hikes in the coming months.

I strongly believe it’s now time to seriously consider other practical solutions to end this double inconvenience of high prices and inavailabilty of electricity.

Alternatives like solar and gas could ease the problem quite significantly but it comes at a cost.

In fact, the installation costs might be quite discouraging, but once the systems are in place, there are no major expenses to be incurred – this including solar electricity, solar water heaters and gas.

Electrical geysers chew electricity while solar heaters are effective and efficient.

Natural gas is also a realistic alternative.

The system is cheaper to install by far and gas cylinders normally last for months.

Gas can be used for heating water, ovens and stoves in general.

Larger systems can also have central heating.

Gas is readily available and suppliers have delivery services for 10kg cylinders and above.

And unlike electricity, gas geysers only heat water on demand, which means that you don’t sit around with pre-heated water in your geyser.

It only heats on demand.

And when cooking, pans heat up quickly and, importantly, cool down when the gas is switched off.

It is a different type of heat and is great for making oven bread.

Worth a try!

  • Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.

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Langenhoven Park chain store robbed

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SHOP ROBBERY . . . The Walk Centre in Langenhoven Park

Bainsvlei police in Bloemfontein have launched a manhunt for suspects involved in business robbery at a chain store at The Walk Centre in Langenhoven Park on Wednesday.

The complainant, who is the manager of the shop, told the police that two men walked into the shop pretending to be customers before robbing the shop.

“Suddenly they pulled out firearms and accosted the four cashiers and instructed them to walk back into the complainant’s office,” police spokesperson Lieutenant Colonel Thabo Covane said in a statement.

“The suspects robbed the shop of different brands of cellular telephones as well as an undisclosed amount of money, and fled the scene in a white Renault Clio with registration number HRT 558 FS,” he added.

Police were called to the scene and they are now investigating a case of business robbery.

Covane said anyone who might have information that could lead to the arrest of the suspects may contact Captain Thapelo Motseki on 082 466 8405 or call the SAPS Crime Stop number: 08600 10111. Alternatively, information can be sent via MySAPS App. – Staff Reporter

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Property

Duets are sectional title too

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A duet unit is by definition a two-unit sectional title scheme. Or at least is supposed to be.

However, I have seen these mini schemes with up to five units. Not sure how they get away with it.

Either way they are still mini sectional title schemes and have to be treated like their big brothers – but they aren’t.

Usually, each owner has their own rates account, own water and electricity account and just does their own thing. But that is where the complications come in.

Some owners have a bond and thus insurance. Some bought cash and forgot.

A body corporate is supposed to have a body corporate policy on all the buildings.

Let’s say that there is a fire in an insured unit but it also results in the building down of an uninsured unit.

And because this is a body corporate and all parties are trustees that are expected to have a body corporate policy, they will be equally negligent.

That means that the owner will have to pay 50 percent — or whatever the Participation Quota (PQ) ratio is — of the uninsured unit owner’s loss.

Would you like to be in that position? I don’t think so.

The same applies to maintenance.

So, if your neighbour thinks that his roof needs to be replaced, you will be liable for that same PQ part of the replacement cost.

The trouble is that nothing will happen while everyone is happy and things are running smoothly, but when there is a major problem, people look for solutions to their financial crisis.

It’s not worth it.

Run your mini scheme properly and contact Community Schemes Ombud Service if your neighbour won’t.

  • Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.

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