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Article Contributed by Neels Theron
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SA Property Investment: How To Get Going!
There are probably very few forms of investment where you don't
need money to make money.
When you try borrowing money from your local bank to purchase
shares in that bank you will most certainly be shown the door in
a polite way! This will quicly prove to you that you will need
your own money to attempt making money on the stock exchange!
On the other hand, if you ask them for a sizable loan to
purchase a property, they will probably do everything they can
to make it possible for you to use their money to invest in your
property...
How can you get going to make money - using mostly the bank's
money! - through property investment in South Africa?
The first thing is to start a savings plan to build up a deposit
if and when needed.
Many developers do ask a deposit to ensure the buyer is serious.
You do not want to be in a position of having a wonderful
property investment opportunity and no cash deposit at hand!
On the other hand, you should keep in mind that paying a deposit
is not a legal requirement in South African property law. You
may therefore want to try and avoid paying a deposit in a
property investment transaction.
Secondly you should look into increasing your buying power by
joining forces with family or friends.
The size of the bond is determined by the size of the repayment
you can service. As a rule South African banks won't want you to
use more than 30% of your income for that purpose. As an
idividual you will therefore generally be limited.
One way to overcome this limitation is to form an investment
club with family members or friends. Your combined income will
then be used by the bank in determining the loan.
Structuring a close corporation or trust correctly can therefore
empower you to invest in a much bigger way - while still using
the bank's money!
Then start doing your homework about what kind of property you
want to invest in, what the purpose of the purchase would be and
whether you will be able to achieve with it what you intend to.
Are you buying to live in, to speculate or "flip" soon after
buying, or to renovate and sell?
In all instances you should carefully investigate the costs
involved before getting into a deal, to ensure as best you can
that you aren't overpaying and therefore undercutting your
eventual profit or capital growth.
Property investment is essentially a long term investment. Huge
profits can be made in a short period, but massive fortunes are
build up over decades. Opportunities will always be there; do
not shortsell yourself by thinking you must build Rome in one
year!
For more information visit
http://www.property-investment-south-africa.com
About the author:
Neels Theron of www.articlesnap.com -
where he offers original Private Label articles with a special
Rewrite Kit to webmasters and publishers of niche sites -
researches, writes, and publishes full-time on the Web.
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