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It’s still better to buy than to rent

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While interest rates are set to rise in 2022, the rise is likely to be very mild.

This still means that buying your own flat or townhouse is far better in the short to medium term and definitely a real winner in the long term.

With current rentals for nice two-bedroom flats being around R6 000 per month, it is still most often cheaper to buy than to rent.

This is in absolute terms because the cost of a bond plus the levy payments is still often below the rental.

A bond of R6 000 means that you could get a loan of R720 000.

At R5 500 you still get a bond of R660 000 and have R500 per month towards the levy and rates.

While interest is going up slowly – likely to be one percent higher at the end of 2022 – rentals will continue to rise year on year.

So your R6 000 per month rental is likely to be R6 600 at the end of the year.

The reality is that for the first five years, you are likely to pay the same or slightly more to buy your own place but after that you actually score and score substantially.

While interest rates move up and down over time, rentals and value will continue to rise.

I purchased small holdings at the end of the 1980s for as little as R40 000 – its value now is over R1.5 million.

I could never have saved R1 496 000 over the last 30 years.

Now I have no bond on the property and only have to pay the rates and taxes.

Buying property is always an expensive exercise but over time it becomes the best investment that you can make.

You need to do your homework and buy the best property you can in the best area you can for the best price that you can.

It is important to understand that a strong well-maintained home is a better investment than a poorly maintained scruffy one.

Always look for the best suburb, the best street and the best home in that street that you can afford.

But owning some property is better than not.

Poor homes in good areas can be fixed up and improved.

Good homes in poor areas will however not increase in value over the short and medium timespan.

Make sure you understand what is happening in an area.

Willows, for example, changed from being a family home area to being a student housing area.

Prices were badly affected by the deterioration of the suburb into a scruffy, poorly maintained high crime area and all the disruption caused by students moving into the area.

Some properties benefited from this change in the area especially those with security but I would never advise people to invest in the area.

On the other hand, suburbs like Langenhoven Park continue to see the building of new high-class properties such as expensive townhouse schemes that are keeping a more stable population in the area.

There is no sign that this is likely to change in the near or middle future and so it has retained its most popular status and prices continue to rise and properties are easy to sell. But you will pay a high price for any property in this area as a result.

But coming back to where we started: my advice is don’t rent – buy and then you will be the destiny of your own future.

  • 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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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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