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23 April 2009

The law of relativity applied to investments
Rode's South African Property News - South Africa
The first law of investment is that returns are relative.

Over the past year or so, equity values worldwide have more or less halved, yet the latest available capital returns on directly-held property in South Africa are still positive. This illustrates the truism that property's returns are less volatile than those of equity, even though property will never outperform equity in the long run.

The recently released IPD return statistics for property illustrate the classic trade-off between risk and return, and non-residential property investors can congratulate themselves on having been invested in property during these uncertain times.
Rode

Rent shocker for landlords: bombshell court finding
Realestateweb - South Africa
Mortgage bond legal loophole: victory for defaulting tenants. New court judgment affects commercial, residential properties.

Landlords with mortgage bonds registered over their rental properties may have unwittingly surrendered their right to sue defaulting tenants for unpaid rent without even knowing it!
This was the warning from Ian Slot, Managing Director of Seeff Properties Atlantic Seaboard, City Bowl and V&A, this week after a Durban court upheld a tenant's appeal.

Slot urged landlords to carefully check loan agreements on both commercial and residential properties. In a statement released on Monday, Slot - an attorney - said the tenant claimed that, because his landlord had ceded his rental income to a bank as security for a loan, only the bank had the right to take action against him.
RealEstateWeb

Beware the pitfalls of rent-to-own, says IEASA
RodneyHayter.com - South Africa
With banks now insisting on large deposits before granting home loans, many buyers are looking at other purchase options, including rent-to-own agreements.

And in theory, says Dr Willie Marais, national president of the Institute of Estate Agents (IEASA), both parties to such agreements win. For the would-be seller, the advantages include:

  • The opportunity to tap a broader market of potential buyers, not just those with excellent credit and cash for a deposit;

  • Rental income to cover the existing mortgage and an opportunity to lock-in the property's price that might otherwise fall in a down market;
  • A tenant with a vested interest in keeping up the property because it will soon be their own.
RodneyHayter.com

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