Is it the right time to invest in the residential buy-to-let market in South Africa

This seems to be the question I get asked most frequently.
Stock markets are making losses with exception of Resource stocks which in themselves are volatile.

My view, since I began investing in residential property as my preferred asset class, was that residential property could give the average man in the street the opportunity to secure his or her financial future.

So back to the question, as with most investments property is also cyclical.

My assessment of the current residential market, is based on a number of observations and discussions with industry player from Estate agents to Bond Originators to Investors.

The impact of the NCA on credit exposure plus higher interest rates is resulting in three factors:

1) People who own there own property cannot afford to pay their bonds are looking to be bailed out. There is therefore an opportunity to pick up these properties below market value and to secure the current owner as a tenant.
2) Buy-to-let investors that have attended seminars over the last few years have now over extended themselves, and cannot obtain re-financing to cover their shortfalls. This also offers new investors or those that have been more cautious, the opportunity to pick up properties that are being offloaded at below market values.
3) People who have over extended themselves with credit are experiencing repossessions and resulting credit blacklisting. This means they will struggle to gain approval to obtain bond finance for about 10 years. This means these people will have to rent.

In addition, my company Rent-Smart is seeing a rise in demand for rentals and annual increases averaging 10%.

So in my view the answer is yes.

Click Here for another view that I read last week.


You make up your mind!


Cheers,
Russell.

Property rates taxes increases Pretoria

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SINCE YOUR RATES AND TAXES CAN INCREASE WITH UP TO 600% IF YOU DON’T QUERY THIS WITH THE MUNICIPALITY BEFORE 30 APRIL 2008.

FOR EASE OF REFERENCE, I ALSO COPIED THE PRESS RELEASE FROM TSHWANE MUNICIPALITY’S WEBSITE BELOW.

Property Owners within the Tshwane (Pretoria) Muncipaility

Please be aware of the the fact that rates could rise by up to 600%.

PRESS RELEASE PUBLISHED ON TSHWANE GOVERNMENT’S WEBSITE

http://www.tshwane.gov.za/press_Detail.cfm?ID=297

Press Release:
Inspection of the Valuation Roll and the Lodging of Objections

03 March 2008

The Valuation Roll for the 2008 to 2011 financial years will be open for public inspection at the offices of the Municipality from 3 March to 30 April 2008. The Valuation Roll will also be available on the municipal website.

The City of Tshwane appeals to property owners to inspect the Valuation Roll. Any owner of property, or any other person who so desires, can lodge an objection with the City Manager on any matter reflected in, or omitted from, the Valuation Roll within the designated period. The objection must apply to a specific individual property and not the Valuation Roll itself.

The form for the lodging of an objection can be obtained at the offices of the Municipality listed below or at www.tshwane.gov.za.

The completed forms must be directed ONLY to the offices as here-under listed. These forms may NOT be e-mailed or faxed as only originals will be considered. The following officials can be contacted for further information in this regard:

Sherry Hendricks	012 358 8377	sherryh@tshwane.gov.za
Elzet Scheepers	012 358 8379	elzet@tshwane.gov.za
Letticia Tshuto	012 358 8343	letticiats@tshwane.gov.za
Isaac Lehobye	012 358 8380	isaacl@tshwane.gov.za.

Residents should note that:

• No objection will be considered by the Municipality unless it is lodged on the prescribed form and in time.
• Only original forms will be considered.
• The lodging of an objection will not defer liability for payment of rates beyond the date determined for payment.

OFFICES WHERE THE VALUATION ROLL IS AVAILABLE FOR INSPECTION:

• Akasia Customer Care Centre
  16 Dale Avenue
  Karenpark
• Hammanskraal Customer Care Centre
  532 Lovelane Street
  Mandela Village, 0400
• Atteridgeville Customer Care Centre
  Office block E, 1 - 12
  Atteridgeville Municipal Office (Mini Munitoria)
  Komane Street
  (between Mngadi and Radebe Streets)
• Ga-Rankuwa Customer Care Centre
  Stand 9111, Setlogelo Street
  Zone 5
  Ga-Rankuwa
  0208
• Beirut Customer Care Centre (Winterveld)
  Stand 1864, Beirut
  Winterveld
  0198
• Mabopane Customer Care Centre
  Block X, Stand 1653
  Mabopane, 0190
• BKS Customer Care Centre
  373 Pretorius Street
  Pretoria
• Mamelodi Customer Care Centre
  Mini Munitoria
  Makhubela Street
  Mamelodi
• Centurion Customer Care Centre
  Cnr Clifton Avenue and Rabie Street
  Lyttelton
• Soshanguve Customer Care Centre
  Cnr Commissioner and Tlhantlhangane Streets
  Stand 2275, Block F West
  Soshanguve
• Eersterust Customer Care Centre
  Cnr PS Fourie Drive and Hans Coverdale Road West
  Eersterust Recreation Centre
• Temba Customer Care Centre
  Stand 4424, Unit 2
  Temba/Kudube
• Fortsig Customer Care Centre
  Van der Hoff Road, Extension 20
  Boekenhoutkloof

Released by: Integrated Communication, Marketing and Information Services

WARNING FROM FRED NEL (Corporate and Social Market Research)

Dear Colleagues

The new property rates tax system is here! From the article below it is evident that the Tshwane Council has published its new valuation roll. Please advertise this fact as widely in your wards as possible so that residents can check on the market values attached to their properties by the Tshwane Council. Remember, the new system of valuation is going to tax you on the property value plus the value of your improvements and must be based on market value. This initial implementation is going to lead to possible increases in property taxes for some residents (in the suburbs especially) by up to 600%! There is no capping on the increase of the amount on your bill, only on the % increase in the Rand that a council may announce every year.

You are therefore going to be confronted heavily on this issue in the next 6 months until the issue has settled down. It is therefore crucial that residents whose properties are overvalued lodge the necessary objections with the Council by the due date advertised (30 April 2008). Once this date has passed, residents have no choice but to live with the new rates they are going to be charged. My understanding is that the Council does not have to indicate to ratepayers what the new amount on their bill is going to be during this comment period, so people are still in for their shocks. However, we will push the Council to publish this information as well through our finance portfolio spokesperson.

The implementation of this new property rates tax system is going to have a huge impact on the accounts paid by property owners. We will therefore have to lobby for a reduction in the rate per Rand charged and an increase in the rebate that is given to homeowners by the Council. Business properties are going to be hit especially hard!

Ensure you know the new property rates act and how it works so that you can explain it to your residents. This is an act imposed on local government by Parliament and we have no choice but to implement it. It is how we implement it that may make the difference.

However, it is important that you know of the possible impact this new property rates tax system is going to have on your voters. Please ensure that you are up to speed with it. If needs be we can request experts (like Hein) to address us on the issue, please let caucus management know if you have such a need.

Also please visit www.tshwane.gov.za to test the system, I did and it seems to work. There are also policy documents available on the property valuation search page.

Good luck!

Regards

Fred Nel

Corporate and Social Market Research

Leaders in CSI Consulting and Research

Tel: 0123422778

Fax: 0123427781

Cell: 0832632427

www.csmr.co.za

ARTICLE PUBLISHED IN BEELD

Webwerf wat moet sê oor taks, gee pyne
Mar 03 2008 09:53:07:450PM - (SA)

Druk artikel E-pos storie aan 'n vriend

Cobus Claassen

Inwoners in die Tshwane-metrogebied was gister kwaai omgekrap omdat hulle nie op die Tshwane-metroraad se webwerf kon vasstel waarteen hulle eiendomme gewaardeer is met die oog op die nuwe die munisipale eiendomsbelastingwet nie.

Dié raad het vroeër bekend gemaak die waardasielys sal van 3 Maart tot 30 April beskikbaar wees sodat inwoners wat meen dat hul eiendomme te hoog gewaardeer is, beswaar kan aanteken.

Beeld het gister verskeie oproepe van inwoners ontvang wat nie op die raad se webwerf, www.tshwane.gov.za, toegang tot die waardasielys kon kry nie.

Die telefoonnommers van amptenare wat die publiek se navrae moet hanteer, het boonop net gelui of inwoners moes etlike minute aanhou voordat hulle gehelp is.

Beeld het self vergeefs probeer om na een van dié telefoonnommers deur te kom. Sommige inwoners kon wel toegang kry tot die waardasielys, maar dit blyk of veral deeltitel-eienaars sukkel.

Mnr. Piet Wessels van Centurion sê “as dit die manier is wat die munisipaliteit die nuwe erfbelasting se administrasie gaan hanteer, kan inwoners regmaak vir frustrasie en chaos”.

“Ek kry nie my meenthuis se waardasie op die webwerf nie en sukkel om antwoord by die raad te kry. Bel daai nommers en kyk of jy gehelp kan word.”

Mnr. Console Tleane, die raad se kommunikasiehoof, het gesê dit blyk nie of daar fout is met die webwerf se skakel nie.

Hy het ’n beroep op inwoners gedoen om seker te maak hulle tik die korrekte inligting in wanneer hulle die webwerf besoek.

“Ons sal probeer om die stelsel te verbeter en meer gebruikers-vriendelik te maak sou die publiek nog probleme ondervind.”

Tleane sê die raad se departement van finansies kon nie gister byhou met al die oproepe nie.

Die metroraad moet kragtens die Wet op Munisipale Eiendomsbelasting sy nuwe beleid oor eiendomsbelasting op 1 Julie in werking stel.

Waar dit by deeltitel-eienaars kom, behels dit dat die raad die administratiewe taak van bestuursagente oorneem en maandeliks aan elke deeltiteleienaar ’n rekening vir grondbelasting stuur.

Waar tariewe tans gehef word op die hele stuk grond waarop ’n deeltitelkompleks bestuur word, gaan ’n tarief voortaan afsonderlik op elke eenheid gehef word.

Ook vir voltitel-eiendomme sal die belasting gehef word op die grond- sowel as verbeteringswaarde. Benewens die webwerf is die waardasielys ook by die raad se kliëntediens-sentrum in Pretoriusstraat 373, satellietkantore en by munisipale biblioteke beskikbaar.