Five reasons why small businesses should invest in property
Regardless of whether a small business wants to diversify its investment portfolio or intends to own the premises from which it operates, owning commercial property can provide entrepreneurs with great returns.
Attie Anderson, Head of Commercial Property Finance at FNB, says returns on commercial property investments will largely depend on the type of building and the area in which the small business invests. Any building which is used for business purposes, for instance, retail space, office parks and industrial properties, will qualify as commercial property.
He shares five reasons why small businesses should consider investing in commercial property:
Six steps to prevent property transfer delays
Conveyancers, the Deeds Office or the city council are often blamed for the delays in transferring properties. Paul Stevens, CEO of Just Property, says this criticism is often well founded, however, delays can often be prevented if sellers take certain steps before selling their property.
Stevens says there are steps sellers must take when preparing themselves for the property sale to prevent certain issues from becoming a problem later on in the process.
“The idea that these issues can somehow be sorted as the sale progresses is invariably wrong - going ahead without resolving these essential issues can delay and jeopardise the sale agreement,” he says.
Stevens provides six steps to prevent property transfer delays:
How to read the market
As in any trade or industry, various factors and current economic standings influence the property market specifically, and changes the trend or shape it takes. Wendy Williams, Sales Director of Engel & Völkers Southern Africa, says when buying or selling your home, you should consider whether it's a buyer's or seller’s market, and how this would affect the offers received on your house, as well as the new home you want to obtain.
“Buyer's and seller's markets don't last forever. It's hard to predict what the market will do with any accuracy, and things can change slowly or quite rapidly - depending on the economic and political outlook,” says Williams.
Why property inspections are vital for landlords and tenants
When it comes to renting out a property, a home inspection is vital to ensure that the interests of both the landlord and tenant are protected according to Grant Rea, RE/MAX Living Rental Specialist, who says that while it may seem like it can be a tedious exercise, not doing a proper inspection will leave the landlord with little, or in fact no legal recourse should their asset be damaged in anyway.
“Landlords or rental agents who have not conducted a property inspection when the tenant takes occupation will not be able to take any action in the event that the rental unit has been damaged during the course of the tenancy,” says Raw.
“Generally, a landlord or rental management agent will be able to withhold the rental deposit to mitigate any financial cost of repairing any damage to the rental unit - however, if no property inspection was done beforehand, they will not be within their legal rights to do so, and will have to absorb the full cost of the repair.”
Enclosing patios in a sectional title scheme
There is often discussion and debate on the issue of the enclosure of patios or balconies in sectional title schemes and whether they become part of the section of the owner - in which case their participation quota (PQ) will be higher - or whether it remains part of the common property, but for the owner’s exclusive use.
Michael Bauer, general manager of the property management company, IHFM, says if the habitable space of the unit increases, it becomes a larger section and section 24 of the Sectional Titles Act applies
Bauer says this would then mean that the PQ factor is higher, and thus the unit’s levy will be higher.
“The question arises as to whether this is habitable space, is situated on an enclosed exclusive use area, common property, or is already part of the section,” he says.