 Good evening and welcome to episode 391 of the Private Property Podcast. I'm your host, Usam Andouwakumalo. If you join us for the first time, welcome to the Wednesday edition of the Private Property Podcast. And of course, do make sure that you're subscribed to our social media pages like us on Facebook and of course, cross all our social media pages. You're tuned in to the early daily property show that helps you in certain cases to all your property needs. And to all our regular viewers on Facebook, on Instagram, on YouTube, welcome to it. You know how we do every single weekday, you and I have an appointment where I'm always in conversation with a property expert who helps us make better property decisions. And it doesn't matter where you are on your property journey, we're certainly here to help you along the way. And talking about helping you along the way, you know that there's also a whole host of other great shows that you can tune in to right here across private property social media pages. As it is a Wednesday, you can catch S, you can catch S to class it on the first time home buyer show, which is always in conversation with people who've not only walked that first time home buyer journey, but have gone on to grow their property portfolios from strength to strength. Every Tuesdays and Thursdays, you know, God brings you the farm and podcast, tackling all things agriculture and Mondays and Fridays, you can catch child, the whole shopper show, which is always giving us exquisite exquisite tours of amazing properties that you can find on triple W for private property.co.za. And of course, if you follow myself, I'm doing underscore K on social media, tackling all things relating to property. Now, of course, one of the things that you will find on our social media pages specifically our Facebook page is that great competition that we are running. We want to find out some of the great property advice that you have picked up while watching the show. And of course, we now have a thousand runs in the money bag yesterday's winner did not claim the prize and all I have to do to stand a chance of walking away with that cash prize is to make sure that you drop us, you know, some of the great advice that you picked up while watching the show and to stand a chance of walking away with that cash prize. And in the event where we call your name, you have to drop us a message before the end of the show. And that is the only way that you can claim that cash. Well, I'm so excited to see later on who's the lucky winner and whether or not they're going to be watching and can claim that prize. Really getting the love on our Facebook page and all the evidence that we do those green hearts continue sending them. I'm going to be going through some of the great posts that you shared with us on that post on our social media posts. And one of the great things that we're certainly picking up is that we've got over six thousand comments on that post. So do keep the love coming. Do you keep sharing the great advice that you have picked up? You absolutely want to see it later in the also sending those green hearts on our Facebook page. Well, kickstarting our conversation is even we're looking at what you should consider when shopping for an investment property. I know so many of you at home, you know, if you already own your primary residence, you look wanting to look at what are some of the things that you should think of when you want an investment property. And perhaps you haven't started, you know, or haven't gotten your feet on the property ladder just yet and want to be clear on what are some of the factors that you need to consider before taking that big leap. Well, to help us get a bit of sense of what you can do, what you should do, what you should consider before, of course, making that big decision. I'm joined this evening by Lana Fisher, who's a financial planner at Fiscal Private Client Services. Lana, good evening and thank you so much for joining us on the show. Good evening, Zama. Thank you for having me. It's such a pleasure to have you with us, Lana. I think, you know, investment properties are such a big thing and there's so many different things that people at home always have to consider. I think before we look at some of the integrities and understanding, you know, different factors to consider, when we look holistically at your property investment journey, what are some of the key fundamentals that you always just need to bear in mind the moment you are looking at property as an asset class that you may be interested in investing in? So when looking at investing in property, I mean, one of the biggest things location is obviously a big thing when when buying a property with that's for your home or for investment and where you buy will. So, you know, the market, how it is there, will you be able to easily sell it again? If you need to, those sort of things. What's the rental income that you can possibly receive from the property? So you obviously have to look at rentals in the area. Just determine what you what you can get. You know, are you going to be renting to a family? Are you looking at renting for student accommodation? That also determine the type of area that you should look at. Yeah, those those are the factors. And I think when we then look at how an investment property as we're even speaking of a how an investment property sort of ties into a bigger investment portfolio, how shouldn't be even looking at, we'll say, the overall asset allocation? Because sometimes people don't look at real estate as a part of the overall investment portfolio, but sometimes almost only have that. And this is a student, of course, pension funded work and not realising some of the dangers in allocating a very huge percentage of your money into only one asset class. Yeah, that's very important. You know, you have to look at your investment portfolio as a whole. You as you mentioned, you're having your pension fund. Are you do you have provision for retirement? Do you have an emergency fund set up in the event that you need that? You know, you have to look at your goals and determine how life is going to go. Are you going to buy a car soon? Do you need to have that money aside? You know, if you need to put a child through university, do you have enough cash for that? So putting all your cash into property is sometimes dangerous, especially if it's your first and only asset. Because, you know, as we're talking about you, you can sell a portion of your property. So if you need access to any capital, you have to sell the whole thing. And yeah, so you have to look at where life is going. What your goals are. Are you set up for the short term before you start looking at property? Is this as a long term investment here? And I want to find out from the views at home, how you've allocated your investment portfolio, the overall investment portfolio. Is it heavily geared towards or heavily focused? Because we know that word gearing also means something in the financial context. Is it heavily focused on one type of asset class and that asset class perhaps being property or something else? Or is it a relatively diversified investment portfolio? Do you share with us down below? I want to find out how you're thinking of it. I know that some people are saying, look, for maybe a short term, I'll heavily focus on property. And of course, Lana, we look at the dangers of trying to short term real estate. I think there are probably other asset types that you can try and take a short term date on. Real estate isn't always the best to do that, especially in the market that we're finding ourselves in. There certainly was a period where you could do that and capital appreciation would be able to enjoy it within a relatively short period of time. But unfortunately, that isn't the case anymore. What are some of those disadvantages, Lana? And I can already probably know that the regular views at home and the most seasoned investors already know that you do not do that. But for those who are not as seasoned, what are some of the shortfalls of trying to short real estate, especially in the market that we are finding ourselves in? So the first thing is obviously when investing in property, I mean, the rental income, that's the bonus, right? But people have to remember all the costs that go along with purchasing a property. You know, you pay condensing fees, sometimes you have to pay transfer duty depending on the value of the property and those sorts of costs. In the short term, are you going to make back all those costs with the rental income you're going to receive? You know, as we said, property growth is not what it used to be. Are you going to make back the money you've put in? And that's that's some of the dangers. And then the next thing is, you're not necessarily going to find a tenant immediately. And if you do, I mean, we also with the pandemic, the people can't afford to pay rent anymore and those sorts of things you have to consider if you will have that cash flow constantly to make back that capital that you put into it. And that's such an important one to always remember, taking your comments and questions at home this evening as we look at what you should consider before shopping for an investment property. And I want to find out from you at home also, you know, especially those who have already started with investing in real estate, what were some of the things that you considered before buying that particular property that you realised certainly did help you in making better investment decisions when it comes to your property portfolio? We've got all glad to read in our own Facebook, saying location, location and location is key when buying an investment property, you know, something that Lana was saying earlier. Again, you know, location is certainly very important. We're also now realising that other kinds of amenities are just as important, you know, and when we look at the reality of so many people even working digitally or certainly remotely, things like having a place with a reliable internet whether it's Fiber is so important because your tenant is not trying to be buying data every day. We've seen the cost of data and how much it just eats into our disposable income. So having those kinds of resources wherever it is that you're buying your rental property is absolutely, absolutely crucial. Now then, Lana, when you look at the consequences of, you know, investment properties, perhaps take us through those because I think it's also something that we don't always know of before we start to kind of just think, look, property is great. You'll always make money on property and I don't think I'm going to lose any money. But we know that that isn't always the case. I think we know better and certainly need to understand the potential downside to real estate in this day. Yes, I think one of the biggest consequences that people don't think of Zama is the tax consequences. I mean, you know, a lot of people think, oh, rental income fantastic. It's a second income for me. But they don't realize that this is taxable. There are obviously many deductions that that is allowed. Like, you know, if you are financing your property, you can deduct the interest on your bond repayments. You can deduct any rental expenses like your agency's and those sorts of things. But that also you only declare this income once a year. And that can be a serious cash flow issue if you don't make provision for it. And so people don't realize that. And then, you know, as I was saying, as well, people think property and everybody knows about the primary residence exclusion of two million Dan and people think, oh, property, I'll get that exclusion. It doesn't work that way with the rental property. This is for investment purposes. It's not your home. So people must remember that when you sell your property, your capital gain will be added to all your other gains. And you only have that 40,000 and exclusion every year. So people need to bear this in mind when buying a property. And it's such an important consideration that we always need to be aware of. We're going to go for a quick break, find out who the lucky winner of 1,000 rounds that is in the money bag this evening. I hope that they're watching. They'll be able to claim their prize. And when we come back, we'll be, you know, looking at exploring other ways of investing, more pitfalls that you need to be aware of. And of course, also looking at understanding the tenant profile, because that's something that you're going to have to be dealing with a lot if you're looking at property investment and so much more. In the meantime, I want to find out from you at home what were some of the things that you considered before going into investing in real estate. But in the meantime, let's take a look at who the lucky winner of that 1,000 rounds is. And that lucky winner this evening is Fatima Simji. Fatima Simji, the potential lucky winner of that 1,000 rounds cash prize that we've got on the table this evening. And she's only a potential winner because she has to drop us a message to claim that prize. And as soon as she does that, the 1,000 rounds is coming your way. Fatima Simji, do make sure that you drop us a message down here below in order to claim your prize. Going through some of the great posts that many of you shared, we have over 6,000 comments on that pinpost on our Facebook page. We had Okuto Ramachale saying, I have learned so much. I gain more knowledge from private property on the live podcast. And that's why I live with Toria saying, I would give it a 10 out of 10. I've learned a lot about property and I plan to use some of the advice from the guests that you have in the future. And Nelda Everton, one of our regulars and top fans there, saying I really learned a lot during the show. Things I never even thought of. Do you keep those comments coming? Want to find out all some of the great things that you've learned, some of the great insights that you've picked up? And of course, even some of the tips and advice that you've used in your own property journey, right here on the Private Property Podcast. Continue our conversation with Lana Fissel as a financial planner and at fiscal private client services as we look at what you should consider when shopping for an investment property. Now, Lana, I think location has certainly come out as one of the big things that we need to consider. You also have to be very aware of some of the potential consequences, really being clear about the tax implications when you have a property portfolio. And that's why it also becomes so important to work with professionals because when you have an income, they're certainly going to get expenses because it's probably bonded. I always say I don't do my own taxes that have somebody who does all of that for me and make sure that the investment properties are all accounted for and the businesses are all accounted for and the taxes for the different entities are adequately taken care of. What are some of the other key considerations that we really need to be aware of? Especially for those who know that they're going to be very bullish in their property investment. So it isn't just about having one or two investment properties, but they really do want to grow their property portfolio as much as possible. I think the thing is the more properties you have, you must remember the more tenants you're going to deal with. And that comes with potentially more problems. You know, I mean, the pandemic as I said showed us that there have been people who have lost their jobs, they can't afford to pay their rent anymore. These are the things that landlords have to deal with if you have difficult tenants that you have to deal with as well. I mean, relating agents don't always deal with those difficult issues on your behalf. But it's also based to have a relating agent if you are going to grow your property portfolio to deal with all the admin. I mean, especially those of us that have full-time jobs, we don't have time to deal with all the admin on the side. So those are the things that one should consider. And as I also said, you can't account for underpinned occupancy or you can't assume underpinned occupancy. And the costs of adding the property doesn't go away. So the more properties you have, the more costs they are. And if you're not going to have the income that's going to cover those costs, can you afford to cover it out of your pocket? And I think that's when we talk about tenant management and the potential challenges that comes with managing tenants, especially the more you have, can never be understated. I think sometimes you can even end up having 100 tenants and 19 out of them are amazing and always pay their rent on time and certainly report anything that goes wrong with the property. But that one tenant out of your 100 tenants can be the one that spoils things quite substantially and can also easily be the one that costs you quite a significant amount of money. So really being good and being on top of your tenant management is such a crucial part of your property investment journey. And I want us to then look at the potential growth when it comes to property investment because sometimes people have different kinds of views. Some are misconceptions, if we have to be honest, are about the potential growth that one will have with the kind of returns that you may have in a property portfolio or in your investment when it comes to your property. With others in the ready spoke about this earlier, thinking that you're going to have very high returns in a short period of time. When we look at growth, especially realistic growth, how should we be having a more holistic view when it comes to growth and realistic growth in real estate? Zama, I would say speak to estate agents. In our new industry, we don't necessarily deal with that property growth. We can look at various reports and tell you that it's not the way it used to be. Especially in the shorter term, some people might have to end up selling their properties for less than what they paid or they might just get the same amount back. So speak to estate agents, find out what's happening in the area, what are the properties going for, those sorts of things, and how has it changed over the years? Do as much research into that as possible before you just purchase? Because as I said, especially depending on how long you plan to hold the asset, that's a big factor. And Nanna, when we then compare the kind of growth that one can get in property versus in other asset classes, what's a relatively realistic percentage? And I know it's a somewhat of an unfair question, and the only reason why I ask it is because it's almost as though during this COVID period, we've seen amazing opportunities, but we also know that the scammers have come out in full force and they're also seeing the amazing opportunities that they can take advantage of when it comes to people and often promising very unrealistic figures. Sometimes even as high as 30% returns and anybody who, and we say anybody, but the reality is sometimes people don't quite know what is a realistic percentage when it comes to growth. And it can be in real estate or any other kind of asset classes. So when somebody says 20% or 30%, you think that that might be realistic when we actually know that in reality, that those numbers are simply not possible if you work with anybody who is credible and knows what they're doing. So they're very more likely than not, you're probably going to be scammed and potentially use your money. Yeah, you know, as a mother you say, if it's too good to be true, it probably isn't. So yeah, that's very important. I think comparing investments as well, and we also need to remember that it depends on how long you're going to have it. So there are certain investments that are appropriate for the longer term and they can potentially give you growth in excess of 10%, I mean, 15% even. But the key is to actually keep the investment for as long as you plan to. Over the short term, you're not going to see returns like 30%. That's just, yeah, it's unrealistic. And those sort of funds, maybe give you the 30% in the short term and then tomorrow you could lose 20%. So you have to look at the long term and how much it gives you over that amount of time. And going on to rather our Facebook page, I see that Fatima Singhji is indeed watching. Congratulations to you walking away with that 1,000 rounds this evening on the competition that we're running on our Facebook page. That means we're back to 500 rounds in the money bag. So do continue posting, do continue commenting on that pin person on Facebook page where you sign a chance of walking away with that 500 rounds cash prize. And I think one of the other things that I'm seeing on the Facebook page is people talking about Black Friday specials when it comes to property. And I've said this on my Facebook, on Twitter, just the other week that I have not seen Black Friday special when it comes to property. And if anything, if somebody's offering one, they're very likely, it's likely not really a deal. So always be careful of that. And I think we're already seeing this in other kinds of products where they'll say something is marked down 60% but when you actually take a closer look that was actually the original price sometimes even less, or they're charging you more rather than what they were charging you a few months ago. So I have never seen a Black Friday property special. If anything, I'd probably encourage perhaps some of the attorneys to run a special perhaps an estate agent can reduce their percentage by maybe even a 0.5%. If they charge perhaps a rate of 7%, they make it 6.5 for any mandates that are signed during the searching period. Those are probably your specials that are related to Black Friday and property that I could get behind. But anything other than that, I don't believe it, I haven't seen any credible ones. So do make sure that you absolutely do a proper due diligence when it comes to verifying whether it is in fact a deal or they just using Black Friday to get you hooked on whatever it is that they are selling you. But as we continue our conversation on what you should consider when shopping for a property, an investment property with the Lana FISA. And I think as we begin to wrap Lana, any tips for our careers at home when it comes to your investment, property investment and how they should of course, look at it from a holistic perspective and especially as it relates to their overall investment portfolio. Zama, the key is to speak to people who know the industry, who know about investments. Speak to the right people. Whether you're speaking to a financial planner for your investment portfolio as a whole or whether you're speaking to estate agents just for property investment. It's good to do the research. It's always best that investors know all the information before making a decision, but it is ideal to speak to the right people as well because you're not going to find everything on Google. And you're absolutely not going to find the right thing on Google. Any mistakes to avoid? I think besides speaking to a professional which absolutely should be doing, any mistakes that we should avoid when it comes to investing in property in particular? So I mean, I've spoken to some people and they always say, look, especially if you buy a flat, look into the building itself. Look at how it's being maintained. Look at the levies that you are going to be paying because that'll determine if there are any issues, you're probably going to pay for it later down the line. So look into those sort of things, not just the price of the property and the location. Yeah, look at how the building has been managed and the type of people that are there as well, you know, and we spoke about students and the last thing you want is to come back to your property and there's been party every night and those sorts of things. So look at those sorts of things when purchasing one. And that's such an important thing to always take note of. Lana, we're going to leave it there this evening. Thank you so much for joining us on the show. Thank you for having me. And that is Lana Fiser, who's a financial planner at Fiscal Private Client Services, wrapping up the Wednesday edition of the Private Property Parts Council myself, Osama Donwan, for my law. And of course, congratulations to Fatima Simji, who is the lucky winner of the 1000 Rounds that was in the money bag. And we've backed to 500 Rounds, we'll continue posting and commenting there on our Facebook page. Well, for myself, Osama Donwan Commander and the rest of the team, that's it for us this evening. We'll be back tomorrow at 7 p.m. It is a Wednesday. It's the class that's going to be bringing you the first time home by a show at 8 p.m. Until then, be hoping you're staying home and staying safe.