 Absolutely. Ladies and gentlemen, something that is so important when it comes to property investment as an asset clause is to understand how the returns of property work like. Because you need to keep in mind that there are a couple of different returns that you need to consider when it comes to property investment. This evening I'm going to be talking to Yaku Khorabula who's the Managing Director of Prosperity Enterprises. We're looking at property investment strategies that you need to know. And this is of course at the back of the property seminar, the property investment seminar that private property in partnership with prosperity enterprises is going to be hosting on the 2nd of April. We'll get to know all about it, what you can expect and of course the strategies that you need to keep in mind as a property investor. Yaku, good evening and thank you so much for joining us on the show. Good evening everyone. So great to be here. I think Yaku, let's first just kick start with the seminar that prosperity enterprises will be hosting in partnership with private property. Tell us what we can expect. I'm sure many of you are at home are interested in bettering their property knowledge and certainly getting more insights in how they can better their property investment again. Ladies and gents, this is an event that you do not want to miss on the 2nd of April 2022 in Radisson Blue Hotel in Santon. Private property and prosperity enterprises hosting a full day event from 9 o'clock to 5 o'clock where we are going to equip you and give you the resources to build your property portfolio and to be a successful property investor. We are going to look at property fundamentals. We are going to look at the opportunity of investing in South Africa, specific areas, specific strategies that you should follow when building a property portfolio, where to find the correct investment property or the right investment property. We are going to look at structuring. We'll talk about the numbers of property and how you should analyze property deals. We will look at all the different softwares that you can use when building a property portfolio and also on how to manage your property portfolio after you have acquired that first or that first couple of investment properties and how to run a successful property investment portfolio. Yaakou, I think that's already so many different areas that are very insightful for viewers at home who may be interested. I want us to maybe look at touch on some of the areas that are going to be focused on for the seminar. One of the ones that you mentioned and one that increasingly more of us are talking about because we understand the importance of systemizing your property investment and putting in those right systems is around the software that you need to manage and certainly build your property portfolio. Perhaps talk to us about what we're talking about when we look at the use of tech, the use of software in our property portfolios or how we run our property business and how that could benefit you in terms of growing your property business. Can you imagine that there was a time, Zama, where you would have to look through newspapers to find a property to acquire and how things have changed in the last decade or two and just looking at private property itself as a platform and the phenomenal tools that you have just on private properties platform to find the correct properties, to put filters in place, to get reminders of certain properties that are going on to the market. All of that are tools that you can use that can help you to build your property portfolio. Then I often say, I cannot imagine that there was a time where I would buy a property without pulling a report to look at the historical data from the deeds office on that property, what that property sold for in the past, what similar properties have sold for in the past year or two and to get all of, to gather all of that information and to use that information to make an informed decision when it comes to acquiring property and then just with all these companies managing large amounts of properties, phenomenal data has been gathered through the activity of managing large databases of properties and that data provides us with such vital and important information, information that we can use to make informed decisions when we are building our own property portfolios. And those are just a couple of the points that we will focus on and spend more attention on at the property investment seminar on the 2nd of April. And I think on that, Yaku, one of the key things of course when it comes to property investment is to be able to look at the big picture of property before zoning in, whether it's on the type of property class you're going to focus on and looking at the data from a specific area. I want you to take us through the property trends, especially when we look at property as an asset class. Let's make it in the past 10 years because there's still a debate around property investment as even, especially bricks and mortar, so not listed property as a relatively viable method of investing. And of course, the big thing, the big disclaimer I have to say to people at home, you want to do your research, there is no asset class, that's a silver bullet in your investment. In as much as many of us make quite a significant amount of money in property, many people lose money in property, so you can lose money. It's not a guaranteed method of acquiring money and you want to work with professionals when you make this decision. And so with that disclaimer said Yaku, when we then look at property as an asset class and certainly a means of us investing and it's being part of our investment portfolio, what have been some of the historical trends that we essentially need to be mindful of because I think it's easy for people to look at data from the past two, three years, but not actually take a holistic picture, which can be very dangerous as you and I both know. Absolutely. Ladies and gentlemen, something that is so important when it comes to property investment as an asset class is to understand how the returns of property work like because you need to keep in mind that there are a couple of different returns that you need to consider when it comes to property investment. Firstly, you've got the asset that is appreciating in value. That's your capital growth. That's the increase in value year on year on that investment, but remember ladies and gents, that is not your only return on property investment. You also secondly have rental income that that property is generating and we use a formula called net rental yield to determine your rental income after your expenses. What percentage of your annual rental less expenses? What percentage is that of your purchase price when you are acquiring the property? And then when you want to look at the returns on your property portfolio, you need to consider both the capital growth on the one side and the rental yield on the other side. But then I want to throw in a third lever into this scenario and that is the fact that you are not just investing your own cash. You are actually using the bank's cash as well to make that investment and that's where internal rate of return comes in. So you've got these three elements that you need to keep into consideration when you want to compare apples to apples with asset losses and with investing in property. Because remember with property investment, you could use as much as 90 or 100% even of the bank's money which significantly changes the return components to investing in property, for example. That being said, ladies and gentlemen, just looking at the property price growth of property in South Africa as well as the net rental yield, those two combined already gives a very decent return which makes investing in property still a lucrative investment today. And that, ladies and gentlemen, is Yaku Chobhula who is the Managing Director at Prosperity Enterprises. We're in conversation about property investment strategies that you need to know and of course reflecting on the upcoming seminar that you can look forward to on the 2nd of April that will be hosted by prosperity enterprises as well as private property. I also want to look at if you're a property investor, what have been some strategies that have served you well in your investment journey. I think one of the great things about the show is our ability to share each other's knowledge and certainly share in each other's experiences as much as possible. The one that I will give and I always emphasize this one is don't buy into the FOMO. We tend to find, especially now more than ever, talks around buying now because we've got historically low interest rates and while that factor is a good factor, if you're really looking into investing in property, it alone is not sufficient as a driver for you to get into property investment. There are so many different factors that you always have to consider holistically and not just one. The other one of course is there are certain developments that come in and the marketing is amazing and we'll get searching people on social media saying you must buy, buy, buy and this is going to be a great investment and you don't understand the fundamentals. You don't understand the underlying fundamentals of that as an asset class but you also don't understand what the cost factors with that particular property are. You want to make sure that you're best equipped as somebody going into property investment with all the insights, with all the data before signing on any dotted line as much as possible because we want you to not lose money. Many of us have lost some money and I think the school fees that we have paid is sufficient. You don't need to pay for that school fees at all. It's very expensive school fees that I think not everybody needs to pay for at all. When you talk about it, it's because we've been there. Trust me, it's not nice. Losing money is not nice, especially when you just didn't know better. But of course now you do. You've got the likes of myself, Yaku, of course sharing greater insights and knowledge that can help you along the way. Of course, Yaku, talking about helping us along the way is then understanding the different ways that you can buy a property because I think when I talk about school fees, this is part of the school fees I had to pay, is that we're still getting into a property investment journey, not knowing the different kinds of entities we could potentially buy our properties in and the ways we can structure that property business that is very tax-efficient and maximizes profits as much as possible. I think at a high level, just talk us through some of the considerations that we need to bear in mind when it comes to which entity to buy into and certainly just sort of best thoughts when it also comes to structuring. Ladies and gents, when it comes to building a property portfolio, your foundation is your structuring. The first thing that we teach our clients when it comes to property investment is that you do not want to have assets or debt in your own name. The reason why you don't want assets in your own name is because you want those assets to be protected and also one day when you pass away, you don't want all kinds of fees like estate duties and executive fees and capital gains and tax to be charged on your deceased estate. But then also you don't want to have debt in your own name and there are large amounts of debt. And the reason for that is you very quickly reach a ceiling where you cannot grow your property portfolio further. And now that leaves you then with looking at entities to bolt your property portfolio in. So when you speak to any property investor that has bought a significant property portfolio, you will realize that they have used entities to bolt their property portfolio in. So you don't want to own property in your own name. So that leaves you then with two choices in which you can buy a property or bolt your property portfolio. And the first one is in a property trust and the second one is in a property company. Now a trust in a company works a little bit different whereas a trust is like an entity of its own and cannot be owned by anyone. So you can't actually say I own a trust or it's my trust. It's almost like a person of its own or an entity of its own. Whereas with a company you are still the shareholder of the company. Now the disadvantage of that is the fact that indirectly you are then still the owner or you still own the asset in your name because you are the shareholder of the company. And that is why many property investors when they go to a company route, a property company route, they would put a holding trust as the shareholder of that company. So that then leaves you with either owning your properties in a property trust or secondly owning your properties in a company with a holding trust as the shareholder. And of course that is, you know, in science on the various ways to think about structuring your property portfolio. Some of the considerations that are so important for you to think through because as I was saying earlier many of us tend to pay school fees, very expensive school fees and make some mistakes in the early stages of our property investment journey. And that's something that we do not want you to do at all. Want to make sure that we save you money and make you money. I think nobody wants to lose money especially when it is avoidable. Of course taking more of your questions and comments on Facebook page this evening as we talk about property investment strategies that you need to know. And Yaku, I think I want to find out from you, you know, what are some of the top strategies that you would want people watching tonight's episode to be top of mind regardless of where you are in your property investment journey. Because we have people who are in the, you know, beginning and we have people who are slightly more seasoned and have been doing this for quite a bit. You know, what are your go-to strategies when you think property investment and the key fundamentals that you always keep on top of mind as you navigate and certainly run your property business? Once your foundation is in place or structure is in place, your next step would then be to determine what strategy you are going to follow when you are building your property portfolio. And the first point that I want to make ladies and gents is the difference between a capital growth and a cash flow strategy. First thing that you need to decide when it comes to what strategy you are going to follow is whether it will be more lean towards a capital growth. Remember we spoke of the two returns of property or rental yield and your capital growth or your capital appreciation. To which one are you going to lean? Now it's very important to understand the implications of following a more aggressive capital growth or a more aggressive cash flow strategy. One is not better than the other, it depends very much on where you are at and what your personal situation looks like. If you are somebody that, for example, earns a decent salary and a decent income back that doesn't have a lot of time, you would possibly lean more towards a capital growth strategy that is more passive and where you can actually afford to push money monthly into that property portfolio. Whereas if you are somebody that is starting out and does not have a lot of capital to your disposal or a lot of cash flow on a monthly basis, you would want to follow more of a cash flow strategy where you don't have a big shortfall or any shortfalls at all and where you bought the property portfolio with positive cash flow from day one. So that would be one of the first steps that you take. And then as there are many property investors that are thinking of starting out, I want to touch briefly and this is something that comes out of one of our modules at the property seminar as well under the module of property investment strategies and approaches. And I'm just going to look at three of them tonight and that is buy to live, buy to flip and buy to live. Now buy to live is a great place to start, especially if you need a roof over your head. If you don't need to rent and you can own the property in which you live, that is a great start as a property investor and the reason for that and that is of course, I just want to say ladies and gentlemen, with a number still making sense of this property that you live in as if you would have rented it out to someone else. Now, the advantage of starting your property portfolio with your home as the first property is the fact that there's a couple of protections and covers that you've got. Now the first one is you don't have to appoint a rental management company. So that means your rental yield, your net rental yield in effect is higher. Now let's assume one of your entities own your property and you rent from that entity. Remember, we run our property portfolio like a business. So even if you live in the property and your entity owns it, you are going to pay rent like any other tenant. Now you don't have to pay a rental agency a commission, which means that the net rental is small. Secondly, you don't have to be so concerned about defaults because surely you are going to pay yourself. And then thirdly, any improvements that you make on that property for your benefit while you are living there is also adding value to the property. But as I said, ladies and gentlemen, it's critically important then that the numbers of that investment still make sense as if you would have rented it out to another tenant. Then the second strategy that or approach that I want to speak about tonight is buy to flip. And that is where you specifically find a property that you can buy at a good price, maybe improve it or renovate it and then sell it at a profit. Now a lot of people that want to make chunks of capital available will follow an approach where they acquire property, improve it or renovate it and then sell it. The danger of such a strategy is of course the carry cost if you have to keep that property too long on your books without income. And then of course, the tax disadvantages as well, because when you buy and sell a property, it's not very tax friendly. And that would be a consideration that you would need to look at. And then the third strategy, anybody that would know me know that this is a strategy that I absolutely love is a buy to let strategy where you are buying property for the long term and where you are renting it out. And then there are many sub strategies that you can follow in a buy to let strategy. One could be to pay off the properties as quickly as possible and to level the rental income on the one side. On the complete other end is the refinancing strategy where you would constantly refinance the property to make more capital available and to use that capital for your working capital or your working capital requirements and also to acquire your next buy to let investment property. And as we wrap up this evening, Yaku, any final comments and tips for our viewers at home, especially ahead of that seminar that's taking place on the second? Great. First and foremost, I hope to see many of you at the seminar, the second of April at the Radisson Blue Hotel in Johannesburg. And I'm looking forward to meeting with many of you as well. And then maybe just one last step that I want to give you and one last analogy that I would like to use when it comes to property investment is I would often compare property investment to fishing where you have a number of fishing rods where you put lines in the water and you wait for a bite. Now, those of you that have done that kind of fishing would know that it's a very patient game that you need to play. You need to put the lines in the water and there's not much that you can do to make the fish bite. Yes, you can put good baits on, et cetera, et cetera, et cetera, but it also requires a lot of patience. And then when the right deal comes along to go with that deal, we're sitting with a great platform like private property where you can look at many properties. The more properties you look at, the better you will become as a property investor and the better deals you will make and then the more offered to purchases you submit, the better deals you will make. So you don't just want to submit one offer to purchase and then buy that property. You want to submit multiple offer to purchases. Maybe a couple first gets rejected before one gets accepted and then you want to bring that deal in or reel that deal in and patiently wait for the right opportunity to come. As Amai said, just like you get motivated sellers, they are motivated buyers and as property investors, we shouldn't be motivated buyers that are so excited to just buy the next property that we don't do our homework and that we don't make sure that we make a good investment. And that's where we're going to leave it this evening. Yaku, thank you so much for joining us on the show. Thank you very much. And that is Yaku Hrubala, who's a managing director at Prosperity Enterprises, wrapping up the Tuesday edition of the private property podcast with myself as Amandongwa Kumala. We have shared the details of that seminar in the comments section. If you're interested in attending, do go to the link in the comments section and get all the details. It's on the second of April and you'll be able to certainly look forward to Yaku in that particular seminar. And from myself as Amandongwa Kumala and the rest of the private property podcast team, that's it from us this evening. We'll be back on your screens tomorrow evening at 7pm. Until then, hope you're staying home and staying safe.