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I IIssue: October
2005 I Editor: Berry Everitt I |
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Your Area Specialist:
Chas Everitt International
sales agents have all the latest market information
regarding local property values at their fingertips
– and are committed to the highest standards of personal
service when it comes to selling your home. In addition,
the Chas Everitt International property group offers
you, the homeowner, the best possible exposure for your
property in both national and international markets.
So if you are thinking of selling your home, call your
nearest Chas Everitt International office today for
the name of your local area specialist - or visit www.everitt.co.za
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Every month the Property
Signpost Newsletter will be issued to all our
subscribers, filled with real estate information to
help you make an informed decision, whether you are
buying or selling a property.
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Contents
1. Welcome By Publisher
2. Exhibitions Bring Home the Buyers
3. Quick,
Find a Farm in Town
4. The Making of a Grand Entrance
5. Should
You Sell or Rent When You Go Out of Town?
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1.
Welcome By Publisher
We were delighted to have the
assurance of the Estate Agency Affairs Board this
week that the Fidelity Fund established for the protection
of real estate consumers is not only financially sound
at this time, but in an “extremely favourable”
position.
The Fund is used to pay the claims
of consumers who can show that they have lost money
in the course of doing business with a registered
agent – but more importantly, it is a strong
symbol of the real estate industry’s general
commitment to a strict code of ethical conduct.
The news that the number of people
registering as estate agents has doubled in the past
year to around 64 000 was, however, not so welcome.
Many of the newcomers to the industry, we believe,
are untrained, inexperienced and under-resourced,
and their presence could dilute efforts to maintain
ethical and service standards.
Certainly, the sudden influx underlines
once again the need for consumers to choose wisely
when
appointing agents to market or manage their properties
– their best choice, of course, being an agent
from a long-established and high-profile company such
as Chas Everitt International, not least because we
ensure that our agents are properly trained before
we let them loose in the marketplace.
All our agents also have access
to the very best marketing and technology resources
to enable them to deliver the excellent service we insist
on. And then there’s our much-praised Customers
for Life system… in short, there’s no need
to look any further than your nearest Chas Everitt office
if you want efficiency and effectiveness as well as
absolute integrity.
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2.
Exhibitions Bring Home the Buyers
Despite what some of our competitors would have you
believe, overseas exhibitions are not just a mandate-getting
ploy. They definitely bring in buyers – if you
do them right.
And it seems we have achieved that with our recent
participation in the Earl’s Court and Utrecht
expos, as we already have 71(seventy one) confirmed
buyer visits to SA as a result.
At Earl’s Court, we found that Garden Route
and Western Cape properties – especially wine
farms and golf estates - were still getting a lot
of attention, but that visitors were also starting
to look at KZN, Eastern Cape and inland. It was also
interesting to note the shift away from pure holiday-home
buying to residential/retirement and investment buying.
The most popular price range for investors was R600
000 to R1-million, with buyers looking for retirement
properties from R4-million to R7-million, while at
Utrecht, host to Holland’s Second Homes show,
buyers were hunting in the R1-million to R3-million
bracket.
Most in this case were seeking coastal holiday homes
that they could let out for the rest of the year,
but again, a significant number of visitors to the
exhibition were thinking of actually immigrating to
SA and looking for inland properties close to work
and business opportunities.
We also took note of the fact that prospective buyers
don’t seem to like face brick properties as
much as plastered ones. They prefer clean lines, neutral
colours, big living spaces and easy to maintain gardens.
Views and easy access to shops and activities are
much in demand.
All of which, we believe, are useful insights for
our franchisees and their clients, as well as the
developers we work with – which we would also
not have gained had we decided to stay home.
Indeed, it’s still the case that “you’ve
gotta be in it to win it”, and that trying to
rationalise no-participation at this stage is unlikely
to cut much ice with clients.
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3.
Quick, Find a Farm in Town
Among the best property investment
buys at the moment must be a large stand capable of
sub-division in an established suburb - with or without
a house on it.
The demand for such properties is
bound to rise as the wealthy baby-boom generation ages
and turns to cluster living for security and convenience,
and it is likely to be further boosted by city densification
policies and steep increases in property rates and municipal
service charges as well as fuel price hikes.
There is already a very strong swing
towards the better use of land and existing resources
for environmental reasons, and SA cities are starting
to come in line with other major centres around the
world, where it is unheard of for anyone except multi-millionaires
to live on an acre or even half an acre of land.
Meanwhile, developers are finding
that baby-boomers who have decided to downsize for whatever
reason are generally not willing to compromise on their
quality of life, or on value growth, in the search for
more compact, more manageable properties. They still
want upmarket properties, and many still want to live
in the affluent central suburbs with which they are
most familiar.
For investors, this means that there
will be good returns to be made on purchases of large
properties in such areas that can be subdivided for
the development of exclusive cluster villages of three
or four homes.
Indeed, it seems that substantial
land ownership in sought-after areas will shortly become
a real store of value for those wishing to protect their
investments from fluctuations in the rand exchange rate,
rising oil prices and inflation, and stock market swings.
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4.
The Making of a Grand Entrance
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If your home passes the curb appeal
test, the next thing potential buyers will focus on
is the entrance, so you need to make it look good.
Buyers like to think they're purchasing luxurious
homes and decorators’ tips for creating a really
“rich” looking entryway include tiling
the floor and installing a chandelier – but
they caution that the rest of your home must measure
up to whichever finishes you choose.
Other suggestions for sprucing up
a hallway include adding large potted plants, such
as a Ficus tree or a palm if space allows, using a
large chest or display table to anchor the area, hanging
a mirror where it will reflect light if the area is
dark, and painting the walls a pale shade of yellow.
And of course the area will need
to be well lit (even if you don’t have a chandelier),
spotlessly clean and clear of the clutter that may otherwise
accumulate during your everyday routines, such as kids'
backpacks, toys, keys and post.
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5.
Should You Sell or Rent When You Go Out of Town?
If you’re a homeowner
who’s just been offered an overseas posting
or a lucrative contract in another city, you may find
your enthusiasm dampened by having to decide whether
to sell your home or rent it out until you come back
to town.
Should you sell and be “free”,
or become a landlord and ensure that you have a home
to come back to in a year or two that will hopefully
also have appreciated in value?
Well, tempting as the latter course
may be, especially while property prices are still
rising faster than inflation, it is actually probably
better to sell if you still have a 100% bond on the
property. The costs of operating a rental property
can shave the return marginally thin. And if there
is a sudden downturn in the market, or an absconding
tenant, the financial consequences can be very serious
for the owner who is paying rent or another home loan
instalment elsewhere.
Costs you need to take into account
as a prospective landlord are municipal rates, advertising
costs, regular maintenance costs (which may well be
higher than if you were living in the home yourself),
comprehensive insurance, property management (usually
10 percent of the monthly rent) and the "turn"
costs (cleaning, repairs and painting when the tenant
changes). You should also build in a vacancy rate
contingency (say five percent) for safety.
All of this can absorb up to 40 percent
of the total rental and if you then also subtract
the monthly home loan repayment from the remainder,
there's not likely to be much profit in the arrangement.
But, the equation changes completely
if the house is substantially paid-off and you’re
more interested in capital growth. Then the critical
factor becomes the choice of managing agent –
someone who knows the area well and can advise knowledgably
on a realistic rental level, who has a good track record
as regards the selection of creditworthy and reliable
tenants, and who will see to it that the property is
properly maintained in order to protect its value.
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