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Which properties are the right ones?
We insist on first ensuring the properties are carefully analysed, structured and presented in the most effective way to get the best results for you.
Our one on one discussions will create a clearer picture for you.
What if the property market turns?
There are a number of feelings concerning the property market “bubble” and you would have heard the discussion that he property boom is a bubble and it is going to burst.
This was the initial feeling within the market although the feeling seems to be changing and the thought is that the current price run is by no means a “bubble” but merely the South African property market catching up with world prices and these prices will be sustained, possibly eventually levelling out for a period and them continue increasing along with world prices.
This is a situation, which generally only occurs when rentals requested are too high or if the property purchased is more expensive than recommended. Obtaining the suggested rentals are seldom a problem in South Africa as the upcoming middle class population demands renting at the suggested rental rates.
Should there be a period between tenants, the bond repayments should be covered, as a provision is included on a monthly basis to overcome this possible occurrence
What expenses do I need to cover?
Should you qualify, there should be no initial expenses whatsoever.In most occasions all expenses and costsare covered. The only expenses you need to cover are the shortfalls from the rentals in the first year, which will be identified closer to the time and are minimal if done in line with our method of purchasing.
What are the tax implications?
Tax is an inevitable eventuality and the normal tax requirements according to SARS need to be adhered to. Our suggestion is for you to consult with your tax advisor for the best possible way of structuring your properties according to your personal situation.
How do I go about sourcing the properties?
As mentioned, the purchases of the properties are based on scientific and calculated analyses of each and every property. This means that the slightest error in your selection may cause a financial failure. Our properties have undergone the stringent selection criteria necessary to reduce the already minimal risks associated with this type of investment.
Leave the selection to us and we will bring them to you.
How do I keep track of the properties I have purchased?
Our portfolio system allows us to keep a track of all your investments for you, contacting you when any changes need to be made.
Will I have to manage my properties?
Our calculation process includes the costs associated with outsourcing your property to a rental agent. Due to the volume of properties we have contracted Management Agents throughout the country on your behalf.
What do I pay Preston Holdings?
Unlike traditional investments advisors, which charge exorbitant fees to manage your investment, the sellers of the properties pay all our costs.
There are moves underway to increase the tax liability of sellers of property but as and when this comes about we have a way of changing the structure to benefit both you and the seller.
How many properties can I buy?
With our way of structuring your finance along with our financial partners, we are able to purchase properties on an ongoing and regular basis for you. It has been recorded that the most properties purchased in a two-month period is 23. Naturally with the new Credit Act it is more of a challenge but that is why we handle the finance institutions on your behalf.
There is no limit, lets rather discuss what you are comfortable with.
Do I need to use my own financial institution to raise the bond?
Few financial institutions in South Africa have got their minds around investment property purchasing. Our selected partners source and ensure all purchases are made through approved institutions with the best possible rates for you. Our suggestion is to let us handle the financial institutions on your behalf. You do not need to get involved, your financial “clout” will speak for itself.
Where do you purchase my properties?
One of our secrets is investing in the ordinary suburbs on a big scale, with low risk, and making more money. Don’t follow the bandwagon, follow good common sense.
How do I get to see the properties you purchase for me in other parts of the country?
We all have a tendency to form a personal relationship with our homes. They become sentimental.
The properties we purchase for you are not your homes. Naturally you are free to take the time and incur the expense of visiting them but remember they are investments to be used as and when necessary to provide you with wealth.
View them with as much sentimentality as the R10 note in your pocket.
How do I cover the shortfall expenses after the first year?
The increase in the value of the property as well as refinancing on an annual basis provides for ongoing shortfall expenses.
What if interest rates rise?
For alert property investors this is a double positive. Keeping alert will allow you to fix your interest rates for a maximum of two years thus reducing your risk. Should the interest rate correct within that period you have the opportunity to remove the interest fix.
Should the rates increase the market becomes a buyers market thus allowing you to purchase additional properties as long as negotiated and accepted interest rates are approved by your financial institution.
What if I not be able to rent out my property?
This is a situation, which generally only occurs when rentals requested are too high or if the property purchased is more expensive than recommended. Obtaining the suggested rentals are seldom a problem in South Africa as the upcoming middle class population demands renting at the suggested rental rates.
Should there be a period between tenants, the bond repayments should be covered, as a provision is included on a monthly basis to overcome this possible occurrence
How unique are the Investments?
Unlike shares in a company, ownership of property gives you control of a unique, finite thing. So, each property has its own reality and its own potential to create income.
What is a passive investment?
If you own the title deed to a property, you control who may or may not use it. You can sit back and collect the rent on a property just because you own it (of course, it's more complicated than that, and usually, you have to take care of the building that is on your property). This is called a passive investment.
Is income regular and predictable?
According to respected national letting agents, in the last 30 years, residential rents have only fallen during one year: 1977
Our calculations take care of this for you should it happen again.
How long do I keep my properties?
Property does not wear out (although it could become unfashionable). Property is held by investors and families far longer than companies usually exist. This means that you derive income for decades and even generations.
Do I really need all this knowledge before buying?
Because there is no common stock exchange in property, you can develop localised knowledge or knowledge in a specialised area of property, giving you an investment advantage over all other potential investors. This can enhance your income substantially.
How does gearing effect my investment and can I gear to the maximum?
This ability to gear high gives you what is known as the “gearing effect”. If you get a 90% home loan on a flat and pay a 10% deposit, it means that a 10% return on the purchase price gives you a 100% return on your cash investment. But beware: a 10% loss gives you a 100% loss on your cash investment although this is not a crisis as long as you do not exceed our suggested maximum gearing ratio’s.
How rewarding is property?
The cash you earn isn't the only wealth. It is also the richness of owning and developing something that you can see and touch. Don't underestimate the value of this to you as an investor.
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