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listed property vs buy to let

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THRESHOLD
Super Contributor
Commercial property is a disaster - I struggle to let at a decent price - the tenants can throw the new provisions under the companies rescue section at you and force you to provide services while they stay on free of charge. This completely undermines yoru hypothec. The rates are enormous and the services are higher too. The bank wants your potential buyer to front 30% of the price in cash and won't acccept a second bond against the property in your name (not that that is worth a whole lot) - so you wind up offering the bond to sell the thing and finance your own deal. I have a complex in Randburg where I have been fighting with the council for 10 months now to correct the billing and process the sale - the buyer is on the verge of walking away (I'm suprised he lasted this long.)
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THRESHOLD
Super Contributor
Let me spell this out for you and Richardw - by and large - property is a rubbish investment. And I say that although I have made sum spectacular returns on speculative property. You can use tenants to pay it off and then it is a business - that is another story - but you must buy a number of units to control your business risk. Most people cannot do this since - unlike shares - there happens to be the need to apply substantial sums to each individual property.So they buy one or two properties and - oops! - talk to the banks about the default rate - and then come and tell me how wrong I am!
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Alonzo7
Frequent Contributor
I think there's definitely a place for both investment vehicles. Depends on the Individual (potentially lots of stress with tenants especially if you have the "tenant from hell") etc. Based on my personal experience - the "buy to let" worked out exceptionally well for me even though I have experienced those "hell chappies' - just made me stronger & wiser.... I purchased a few "buy to let" houses in good suburbs in C.T around 2002 & 2003.Tremenous Capital Growth + still receiving excellent monthly passive income (after monthly bond payments & rates & taxes). The added advantage is that the kids would have a good stepping stone...
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Blik
Super Contributor
There are definately investments that will or may give you a better return than buying property, but I dont know any other type of investment where a bank will loan you the sums of cash required, for which you can gear that loan. If you pick a poor property choice, or your tenant doesnt pay - that doesnt mean that all property investment is bad. I have done exceptionally well with property - but thats more from luck and need than from any concious decision made.
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THRESHOLD
Super Contributor
One must be careful of "living in the moment." A profit is only made once a sale is consummated. Many shares (even in large caps) have gone up over 20x in the last 10 years. You cannot base a case for investing in stocks on these in isolation though. All property went up at a rate between 1998 and 2007. Houses in Parkmore moved from R200k to 2M between 03 and 07. This is not normal price behaviour for this asset class. Everybody was a property hero in the last 10 years.
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Zettie_1
New Contributor
You can gear with listed property - 3PM Investments. I have been doing it for nearly 10 years now.
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Not applicable
On a related matter I would like some advice! I currently have some cash in the money market and am looking for a better return without tying up the cash for toooo long. It has been suggested that I put the cash into retail bonds! Your thoughts.....
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Not applicable
On a related matter I would like some advice! I currently have some cash in the money market and am looking for a better return without tying up the cash for toooo long. It has been suggested that I put the cash into retail bonds! Your thoughts.....
0 Kudos
Not applicable
On a related matter I would like some advice! I currently have some cash in the money market and am looking for a better return without tying up the cash for toooo long. It has been suggested that I put the cash into retail bonds! Your thoughts.....
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Pauldelmas
Contributor
I agree better to own stocks on property but what about RIN a new international stock then you also have income from over the water. Invest in more than one stock to spread risk.
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THRESHOLD
Super Contributor
SO PROPERTY RATES ARE SET TO INCREASE BY 120% ON YOUR INVESTMENT PROPERTIES. You have one week to frame an objection. Good luck selling! Still think this is an ASSET?
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doomsdayza
Super Contributor
ja this is an intriguing development. taxing of the "wealthy" continues unabated. cheers. fwiw i've had a rethink about property as a class. too much uncertainty, maybe not a factor now or for the next 5 years but dont won't to wait to see in 10 years etc. cheers
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barry_1
Super Contributor
I have done some research in the matter of international property and have found in the past it has not measured up to local property which slowly is making steady capital as well as interest gains.I have sold half my RIN and intend selling the rest when the price increases and and re-investing in RDF in which I have had a long term holding.This will result in an indirect holding in RIN.
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Not applicable
Zettie, this is an interesting option. Can you give an idea on what sort of loan they give on their side? What sort of interest rate is charged?
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Not applicable
Barry, normally I would agree with you, but this time around, you are buying into a weak market and weak pound, a situation unlikely to be repeated. And UK property market is still struggling, but it has not capitulated nearly like US markets. I think UK property is a better bet. Also, if I am not mistaken, Reinet has been making massive offshore property bets?
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THRESHOLD
Super Contributor
Rates are insane on city pops in the UK. There is huge demand due to the fact that there has been an influx of wealthy from Greece and the rest of the PIIGS. People tend to forget that the UK is a tax haven (as long as you didn't make your money there.) The man-in-the-street is still under huge duress and this is holding back retail properties and the general.greater domestic housing sector (with no real end in sight, unfortunately.) STILL - at least you KNOW that what you own will be yours (or your kids') in the years to come. I fear there is no certainty (or for that matter - sanctity) of tenure in Africa!
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barry_1
Super Contributor
hmmm Skaapkop,Threshhold,i might re-think re your remarks,its not a cut and dried situation,shorter term i still think local is lekker though
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richardw
Super Contributor
Me?! I can't stand property. I have some but wouldn't choose it over equities, ever.
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THRESHOLD
Super Contributor
I was wondering how long you would take - it should have read "as (per)" - Sorry - somehow went wonky as I edited a thought. I put it down to a malaise brought on by all of the pro-property advocates.
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richardw
Super Contributor
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