When I started working in 1975 my salary was R300 per month and my wife earned R350.
I can recall that my bond on our house was R350, but that is where we started.
We literally had a bed, wire garden furniture as a dining room table and a second-hand stove.
That was it.
We had to put the light out when we got dressed because we had no curtain.
But nearly half a century later we own a number of properties, run a very successful and growing business, have no debt and as a result we can spoil ourselves from time to time.
In the meantime, we raised and schooled two great sons who are now at the top of their chosen careers.
This started in 1946 when my parents got married. They were just ordinary working folk.
When my dad emigrated to South Africa in 1975, he had been working night shift in the Ilford Films company on the outskirts of London.
His ambition was that I should do better than he had done and he made me do my school work and be as successful as I could.
Even my grandfather who had been incarcerated in Auschwitz Concentration Camp once told me: “Michael, you must do what you have a passion for when you grow up, even if you decide to be a road sweeper. But always have ambition and aim to be the ‘chief-road-sweeper.’”
The moral of this story in a property setting is that you should have a dream goal and keep that vision in front of you at all times.
You should learn as much as possible about your passion so that you can be the best at your passion.
If you want to own property, see yourself as the owner of a block of flats and visualise how you can get there from owning one bachelor flat.
It is not going to happen overnight. It will take time. Years.
But at all times you must never lose your vision.
You need to read and learn about property.
How do you pay off your debts quicker?
Rather than go away on an expensive weekend to Cape Town take that money and pay R10 000 off your bond, knowing that not only have you paid R10 000 of the balance of your bond, but you have saved long-term interest and paid off your bachelor flat that much quicker.
Don’t buy that 2021 sports car.
Rather buy a second-hand sensible car and take the difference in car payments and pay it off on your bond.
When rents have risen and your bond is down, buy another better property and use your savings to pay off the bond plus the savings.
That way over time you will own one, two, four or even 10 properties, which can be used as a deposit on your first block of flats.
To achieve greatness, you need to visualise where you want to be in 10, 20 or even 30 years.
Over the years we have reduced the debt in our company to zero, we only have a lease on our photocopying machine.
That is how we survived the COVID-19 lockdown and had a record year.
Forming contacts is vital to your success in the business and property world.
These trusted contacts help you get into new developments first. Buying first is always cheaper than buying last.
Not only are the opening prices lower, you also get to choose the best units with the best gardens and the best parking.
Prices tend to rise as the building is complete and sold out.
Your circle should include people in a wide range of disciplines.
For property investment you would need top attorney friends, architects, estate agents and property managers.
These must be people that you trust to give you good advice and look after your properties and your interests well.
Having these people close to you means that you will be the first to hear of good buys, you will get the best advice and you will have a shoulder to lean on when you have questions to ask.
An ideal situation would be to aim to have your portfolio of properties completed by 10 years before you intend to retire.
Get your bonds paid off before you retire and you can live off the income from these properties.
Property has such potential.
I am involved in the development of new apartment buildings that will be sold on a share basis.
There will be one type of investment that give normal net return but the most exciting model is the capital gains model.
With these companies that own the property there is no income from your investment.
The net income is used to buy further development ground and to build other apartments for the company.
Within the first 10 years it is expected that the company will be able to build two similar additional buildings, nine in 20 years and 27 in 30 years.
That would mean that your R100 000 initial investment should be worth R2.7 million in 30 years.
As my grandfather said in the early 1970s, do whatever your passion is and aim for the sky.
- 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.
