Why I use the BANKS Money to Buy Property in South Africa
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- čas přidán 8. 07. 2024
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Why I use the BANKS Money to Buy Property in South Africa
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😂The watsapp Louis it’s guys here gets me everytime
We need some humor in our lives. Thanks for watching 🤣💪🏻
It's just a pity that funding in SA is not as easily available as in the USA...
Great video thanks
Pleasure my friend. It almost seems like its much easier to become wealthy in America overall 🤣
what up Louise its guys here... nice intro... This is probably the 5th video that I watch that you introduce yourself wrong... Nice to meet you Guys Reynhardt
Thanks my friend. Glad you enjoy the videos, and the intro 😂
Hi Louis, I cant see how a 750 K property can bring in 21 K a month. On average a 750 K house will generate between 6 to 10 K max.
Thanks for your comment. Yes you are right, a traditional buy to let (single let) property will give you that type of income.
This is a student accommodation(multi let ) property. This is my actual property. Hope it helps 💪🏻
Something missing in that calculation, if you invest 750k cash, means that's cash that would give me interest which I don't get anymore as it is in the property. My take on it is to buy cash if I can beat the bank with the return and then get the capital gain on top, obviously capital gain is not always guaranteed, that's where the importance of getting the right property at the right price and the right location comes in. An other thing I noticed is that you refer to the value of the property as being the listing price. Unfortunately those prices are most of the time done by estate agents and doesn't have to be a realistic value, many times they are in dream land. But many thanks for all the videos, I really enjoy them and lots of useful information.
Thanks for sharing and adding value to the comments. You are 100% right. This is just used as an example and unfortunately, I can't cover all these details in every video, but you always need to confirm property values. And with buying cash, that is another point I mentioned: "Most" people buy average property cash and end up with no appreciation and below average returns. Thanks for sharing and for contributing to the channel. All the best 💪🏻
An interesting topic would be property management. Especially when one cannot personally visit a property.
Great suggestion, I will look into making a video about this. Any topic/ title suggestion for this video would help 💪🏻
Absolutely, I will be glad should if he can also share a topic suggesting how to access those properties near Jo' burg. I have extensive experience working with University of Johannesburg and Wits providing off campus student accommodation. I need few properties to proceed with the off campus student accommodation business
Is it possible to house hack in South Africa? If not, what other ways are there for minimising costs on a primary residence?
Yes absolutely, all depends on the setup of your property. I will look into making a video about this.
It all depends on how you bought the property. Is it in your own name or a separate entity.
@@louisreynhardt seperate entity
hi
is it possible to get the template you use for the excel sheet
Absolutely, you can pop me an email at louisreynhardt@gmail.com
Levarage is ok as long as there are no black swans. Imagine owning leveraged property during the covid fiasco !!
Absolutely, it's just very, very important to have reserves. I work on at least 10% of the value of the property. If you dont have cash flow, you will suffer. Thanks for your comment.
Hi Louis, thanks for the video. Am I correct in saying that your return on investment calculation is referring to the first year only? The return on investment over a 20year period should be higher on the one that you paid more capital and less interest on. Or are you rather stating that positive cash flow from the first year is more important than a better return on investment over 20years?
Great question, i like to invest for current returns and not speculate on future returns. I would call it investing for cash flow and not appreciation. If you want to do a more detailed calculation you can look at Internal rate if return (IRR)
Which will account for the total i investment period 💪🏻💪🏻
Hi Louis, are you able to explain how you were able to get this approved via the bank, so if a person already has a primary residence via a bank bond, is it possible to get another property if you still paying off your primary one, is it all about disposable income then which proves to the bank you will be able to afford it?
Grrat question! Its a combination of the 5 things I mentioned in this video. But, having the property in the right entity also makes a huge difference. But disposal income is also very important.
Please make another leverage video, or is it covered in your course
Thank you for commenting. This is also something I cover in the course . Check out the course curriculum and see whether you would like to enroll.
To secure your spot, simply click payhip.com/LouisReynhardt and follow the easy registration process.
Looking forward to have you on board.
Hi Louis, so I wanted to buy a property in February 2024. I signed the OTP but my conditions on the OTP were I need to sell my old property before buying the new property. I didn’t want to have 2 properties. But now the OTP has expired and I don’t want the house anymore. Is it possible to leave the deal and move on without any penalties? Remembering that the OTP has expired
You will be able to exit the deal without any consequences. The suspensive clause was not met in time, meaning the contract lapses. Just make sure to communicate this with your agent so there is no misunderstanding.
Until the banks also crash what happens that?
That is highly unlikely, but that's why you take measures like structuring, reserves, and diversity to protect yourself 💪🏻
Hi Louis, Can you do a vid on investing in REITS? Is it possible to buy into REITS with leverage?
Thanks for you comment. Ill look into it💪🏻
Hi Louis, whats the chances you are willing to share that spreadsheet with us please ? Thank you for another great videa
100% you can pop me an email at louisreynhardt@gmail.com 💪🏻
@@louisreynhardt LEGEND!
Hi Louis, could you possibly elaborate on this property type? R21k per month seems like an unrealistic rental income for a property with a value of R850k? Even if this is a 3 bedroom house, you would have to charge each tenant R7000 per month to rent a single room with shared kitchen, bathroom and living area. I just can't see how a student would pay that much for so little? 🤔
Absolutely,
This is a student accommodation property housing 6 students, which totals R21.5k income. This more of a advanced multi let strategy, and its bursary students not private students 💪🏻
What's up Louis it's guys ,rhass😅
😂😂😂😂😂😂😂 I heard it too
😅🤣🤣🤣💪🏻
🤣🤣🤣👊🏻
😂😂😂
Hi Louis, it guys here.
To which entity do you suggest I should put my first property?
Whatsupp brother, I would say a CC with a Holdings yrust owning the shares of the CC
Louis, I'm 19, currently in University, working part time as a video editor, making R15k per month, while not paying for my living expenses. What should my next steps be?
First learn about Bitcoin and crypto !! Then invest in crypto and you will never have to visit a bank for a loan because you will make so much money in the bull market!! You are still so young, you have more than enough time to learn about Bitcoin and crypto. If you do well you can retire at 35 !!
Well done for taking the time to educate yourself. This is the best investment you can make, in yourself. I would suggest focus on the fundamentals of wealth buidlinh. Understand personal finances, build reserves and then consider investing. Feel free to pop me a email at louisreynhardt@gmail.com for more guidance 💪🏻
I agree with Louis. Great job on managing to study, work part time and start thinking about your future.
Also agree with starting with the fundamentals (budgeting, saving, credit, investing etc) there are plenty of great books and youtube channels out there (you've already found one great channel).
My recommendation would be to start a budget. I know this can be difficult working part time with inconsistent income but just being aware of your income and spending is very powerful.
Once you know how much you are spending and on what, set yourself a savings target. As far as possible try to be consistent. Saving a smaller amount every month can be better than saving a big amount one month and then nothing for the next 3 months. It's very much about building the right mind set and the right habits.
You can also start building your credit score. If you are like me when I was studying, you may find it difficult to qualify anything because you don't have a stable income. I managed to open up a student credit card with ABSA (but I'm sure other banks should offer something similar) which has more relaxed qualifying criteria. Again make sure you understand the fundamentals. You aren't opening up the credit facility to spend to the limit and pay the bank lots of interest. It's there to spend money that you would have spent in cash/ on your debit card anyway. Always pay the outstanding balance in full every month to avoid paying interest.
I assume that you are interested in property as you are watching this video. If you are building your credit and saving for transfer costs and a deposit you are well on your way to your first property.
A few other recommendations.
Consider a TFSA. Preferably something that has very low fees, I use Easyequities but there are other good options out there. I would also say open a TFSA that you can invest in ETFs (chasing higher returns bearing in mind higher volitility and returns not guaranteed, but you must be investing with a long time horizon). This will give you a bit of diversity in your investment portfolio.
Before you invest in property be sure that you planning to stay in the country long term. Property is not liquid and can cost a lot of money to sell if you are moving oversees.
And lastly, in your budget be sure to allocate a good portion of your income to enjoying life and making memories. You are young and making memories while you are studying can sometimes be overlooked.
Have a budget, have a goal, work towards it diligently and don't forget to stop and smell the roses on the way.
@@craiggurnell9192 Wow, you're amazing. Thanks for taking the time to write this comment.😁
Louis, I enjoy you tips, but this was a bit unrealistic. Best case scenario you get 4 students for R5250.
Maybe explain the reason behind your R21000 rental income, because it sounds unrealistic.
Thanks for watching 💪🏻
I can imagine this sounds unrealistic but this is actually a property I own, accommodating 6 students. 4 single rooms and 1 double room. Rent is R3760 x4 and R3300 x 2 : R21640
You were just very lucky with that purchase to get that rental income. Multi lets below 1.5mil like chickens teeth, almost non existent.
Thanks for your comment. I do agree, they are very rare and it takes skill to find them but, I own many of them so it is definitely possible. 💪🏻
This was a terrible example. I'm an accountant, in the corporate world you would be fired if you present numbers like this.
In your example you deliberately did not show that when you buy a property cash, you will not be paying monthly installments so the returns are much higher than when you buy a property through finance over time.
Luckily, I am a business owner and not an employee.
Also ,unfortunately you are wrong. Buying cash brings down your ROI. Do the math.
I did, however, show that your CASH FLOW increases, but your ROI decreases. Maybe you missed that part. Either way, thanks for watching.