 Good afternoon, good day everybody, and welcome to the Private Property Virtual Show. I'm Samuel Seif, Chairman of Seif Properties, and I've been in the real estate industry for over 35 years now. I thought what I would do in the next half an hour is to share some of the learnings I've had over that period. The rules of buying a property, five pillars that have stood the test of time, and tough markets, and what I will do is discuss the important aspects that you may want to know when purchasing a home that haven't changed in the past 35 years. So where do we start? Let's understand firstly our motives. What are we looking to do when we're trying to purchase a property? So we need to be asking the questions when understanding our motives, and these are why are you buying, what are you hoping to achieve, do you want to rent or buy, and we'll discuss this in a bit more detail later, and are you looking for a home or an investment. So property can, and in my career certainly has shown, be a rewarding involvement, whether you're looking to buy, whether you're looking to purchase an investment, whether you're considering to say no, I'll invest elsewhere and just rent a property. I think it's important right up front to understand your motives and what you're hoping to achieve. Most importantly, I think when we talk about purchasing property, I think we need to understand the differentiation between buying a home and putting a solid concrete slab under our feet and a good roof above our head. Somewhere where you can raise a family, where you can achieve stability, where you can build and create the value that you're trying to do for you and your family. And I think if we can get that right, first and foremost, that's the best investment anybody can make. Once perhaps that has been achieved, we can then expand later into saying, do we look for other properties, add improvements to it, sell it by a larger property, one more purpose, fully suit in your needs at that stage, do we invest in other properties. What we want to really understand at this stage is to say, what are the motives of each and every one of you as you begin or continue your property journey. Why are you buying? Now for most of us, as I said, that's to put a roof over our heads, to be able to create a place where our family can call a family home and to live meaningful and satisfying lives. What I want to do today, since many of you are relatively new buyers or first on buyers, is to discuss some of the aspects that will relate depending on what your motives are. Having understood your motives, let's go on to one or two other important elements that I believe have not changed in the last 35 years. Be prepared. As the scouts are, make sure that you know what you're looking for, what you need to be doing before you begin your journey. Do your homework. So first is, where do you want to live? Let's investigate the neighborhood. Is it safe? Is it secure? Is it close to your work? Is it close to schools, universities? What amenities, facilities does it offer? Are there shops, gyms nearby, or is that not important to you? Are there work opportunities nearby? Is it zoned correctly for schools? In other words, do you fit into the school that you wish to attend by living in that neighborhood? It's very important that prior to making the actual purchase or investment that you understand where you're going to be. Now most of us tend to want to live in neighborhoods that we know, where we grew up, where our family is, where our friends live. So those answers generally come naturally. But you do need to ask yourself, does it tick all the boxes? Then let's understand when you have seen and are really interested in the property. Let's investigate some of the factors around that particular property. What is discerning? Can other surrounding properties be redeveloped? Can they block out your view? Can other properties understand the condition of the property? Can any plans nearby, for example, building of other institutions or other investments or other projects, shall I say, can they detract from the value once you've purchased? Those are the things you need to take into account and understand when you're looking to make your purchase. So be like the scout. Make sure that before you really commit yourself, you've done your homework. You understand where you're going to live, what that area offers, and what the property itself offers for you. Understand your legal position. What does that mean? So it's not just the question of finding the right property, but you need to understand in what legal entity you'll be purchasing that property. For example, in whose name that property will be registered. Understand the difference between ownership for you as an individual, whether you want to buy it in a company, a trust, or joint ownership if you wish to buy it with somebody else. And for each of those ownerships, the different tax implications. So we need to understand the additional cost to be budgeted for when transferring the property into your legal entity of choice, and the capital gains tax applicable when selling. Make sure that you've done your homework in that regard, that you understand the different implications as a result. Understand your financial position. Now before embarking on even beginning to look for your property, you need to understand how much you can afford to invest. IE, how much deposit you have, and then the finance required and who will be prepared to give that finance to you, what your position will be in terms of being able to make those repayments. So the best way to do this is to get pre-qualified prior to actually going on the search for your property. This generally will save you a lot of time, and the way one can do this is through a mortgage originator such as Uber, and our company is affiliated to Uber, so we would be able to make the introduction and provide that service. Uber would come along, they would look at your financial position, taking all your income and your expenditure, and then be able to give you a pre-qualified certificate as to what you would be able to afford when applying for a bond through a bank or a financial institution. And then understanding your financial position, you need to understand that there are ongoing monthly costs besides your bond repayment, rates, taxes on the property, levies if you're in a sectional title scheme, water electricity, generally you need to also budget for ongoing repairs because that is part and parcel of ownership of property. So you need to put aside and make sure that financially you can take care of those ongoing monthly costs. And lastly, understanding your financial position means that you need to be prepared that interest rates as well as your other expenses that I've mentioned may increase. Now interest rates could increase monthly, those aren't annually the other expenses generally are annually, but interest rates tend to go in cycles and we need to make sure that you're not using your last cent to just cover the interest rates now, and that any increase in interest rates and increase therefore in bond repayments is going to make it difficult for you on a financial basis. Just a short note on interest rates at the moment, we're experiencing interest rates at between 45 and 50 year lows. That's a unprecedented position in which to borrow money from your bank or financial institution and to be able to afford the repayments. Generally what that has meant is that as the interest rates are lower, because your repayment is the same, you can afford a higher bond amount which puts you in a position to potentially be in the best possible time as we stand right now to purchase a property. And I think that the increase that we're having an activity in the market is directly related. So go out, do your homework, understand financially where you are and compared to where you would have been two to two and a half years ago, you have a much greater opportunity of financing and purchasing a higher value property than you would have been. So this is your time, but understand as I said before that interest rates go in cycles and you don't want to be ending up in a position where you have committed yourself and you can't afford with the increase in interest rates. Most important point there now is this is your time, going to buy as I say in my career I've never seen interest rates this low and certainly the activity as I talked about that we're seeing now is a result of this. Okay, so that's the fourth point. And then the last point is something that I've learned over 35 years is to try and buy the worst home in the best street or the neighborhood rather than the best home in the worst street or neighborhood. Now, what do I mean by that? Essentially, you're buying in an area and that area will hopefully have capital growth. And what we're saying there is that if you can buy what's considered the worst home in a neighborhood that will have big capital growth, then that makes far more sense than to buy the best home in the street or a neighborhood that won't be able to have similar growth into the future. And why do you want to do that? Well, if we go right back to one of the first objectives, you need to understand as to what are you actually looking for, understanding your motives. Now, most people say, well, I just want to buy a family home. But generally, if you take the time and the trouble and as I said, to do your homework and be prepared, you can find similar homes in different streets or different neighborhoods, which at a period after some time, five, 10 years, will be vastly different in value. And why is that? Because certain areas, as we know, are more exclusive and more expensive. And if you can get into those areas, even if your home will require upgrading, reconditioning, refurbishment and renovating over a period of time, when you have done that, if financially you can afford to do so, your home will be in the company of those around it that will have increased dramatically in value. Whilst we're being rewarded through ownership of property and through a stable family environment, what we need to try and understand is at the same time, if you buy well, you can have good capital growth. So this is one of the rules that I've learned very early on in my career. And I can suggest to you, try and buy the worst home in the best area or neighborhood rather than the best home in the worst street. Now when I say that, I don't mean that we're all going to move our family of five or six people into a bachelor flat into Clifton, because that is considered the best neighborhood and the highest priced in the country. That's going to make no sense, but a family of five or six people, you're going to need a three or four bedroom home, clearly. But if you can choose between different neighborhoods with three or four bedrooms home for your large family, look for the neighborhood that is considered better, more exclusive. It will give you a higher capital growth and at the same time as looking after your family and putting a roof over their heads, you'll be able to enjoy that capital growth. So those are the five rules, the five pillars that I've seen over 35 years that haven't changed if you want to invest wisely. Understand your motives. What are you looking to buy to be prepared? Make sure that you know what you're looking for, that you understand what you're about. Three and do your homework. Three, understand your legal position. Make sure that from a legal position you are in control and understand what the objectives are in terms of in which entity you're putting the property. Understand your financial position and when you've got all of those right and understand and are completely up to date with one to four, then five, go and find the worst home in the best street on the best neighborhood, give a time, upgrade, renovate it, make it in the same condition as the properties around and you'll have received great capital growth and appreciation over time. Stick with those rules. You won't go far wrong. Hopefully that will give you some assistance in terms of your quest of purchasing the ideal property for you. I have been given some questions that I'd like to go through which may equally at the same time give you a bit further insight, input, some insight and advice that may also assist you in your journey of purchasing properties. So let's go to the first question. Given how most things evolve, how have actual properties changed over the last 35 years? Okay, so generally we've seen some changes and particularly at the moment with COVID in place, we're starting to see some other changes. What really happened was the cycle over the period of time moved very much from suburbia or suburban freestanding homes over the beginning of my career to gated complexes, security complexes have become very, very popular over the last 10, 15, even maybe 20 years as people have chosen security as one of the more important elements that they need to have in their lives. Now one of the interesting aspects that we've had just prior to COVID was that people were actually moving closer to the city into smaller accommodation, they were saving money on big gardens, they were saving money on large electricity bills and keeping big homes going and then we're buying more compact properties, but in fact many were starting to move back into the city to avoid the commute, to avoid the transportation complexities, traffic, etc. Now with COVID what we've seen is amazingly a move away in a short space of time where people are saying well maybe I don't need to live and work in a very close proximity I can look further away, I only need to go to office once, twice, maybe three times a week, the commute isn't so bad actually traffic has decreased and I need a bigger home, I need a home with a study, I need a home with a garden, I don't want to be as restricted so what we're starting to see is a movement away and I think that in general what I've learned is that there are cycles, some stage living in big large properties with big gardens will be popular, other stages moving into town and staying in a smaller apartment with no commuting will be more popular, what it is, it ultimately goes to the first point that I said is to understand your needs, not what everybody else is doing, not what the markets are doing but your own motives, understand your objectives and when you live through those you will be fine. So we have seen changes, I think things will continue to change, you'll have different elements that will be populate certain times and change back again but that's the dynamic element of being involved in property, I hope you enjoy your involvement. Next question, property as an investment over 35 years, well I remember my first property sale 35 years ago it was an apartment in the City Bowl or Cape Town, two bedrooms, 50,000 or 52,000 rent was the purchase price, that property now somewhere between 2 and 3 million, well why didn't we go out and buy many many properties at that time which have appreciated and what we can see there is generally over time properties have appreciated and they have done for many many years they did it all the way up until the global financial crisis of 2008 there was strong appreciation and then after the global financial crisis for the first time we had a time when property values didn't increase. They did again some number of years later to 2014 through to about 2017 and then they've held off for the last three to four years in terms of growth. What do I think? I think property as an investment over a long period of time will always be worth it, whatever you've paid now it's likely to be more expensive over an extended period. What we used to see was increases every year and we're not seeing that at the moment we would see that over a period of time though that properties generally have become more expensive so if you're looking to buy you can get in knowing generally with good comfort that capital appreciation will happen so that leads into the next question when is the right time to buy? Well as I said earlier I don't think that there's ever been a better time to invest in property than is now. What we've seen is the lowest interest rates in 45 to 50 years at the same time with a number of sellers still on the market looking to sell. Normally when you the right time to buy comes about you have a lot of sellers but the timing may not be there, confidence may not be there, interest rates may be high. We're seeing a confluence of events that in my opinion give rise to arguably the best time to buy in my all career being now. Interest rates low, a lot of stock on the market and a good time to come in and invest. But generally the right time to buy is when it suits you. It goes back very much to the first point that I started out with which is understand your motives, understand what you're looking to do. If the right time for you to buy is now that's the right time to invest. Rent versus buy. Often asked again what makes more sense? Do I want to rent or should I be buying? And again it comes back to the very very first point that I made which is to understand your motives. Are you looking to put a roof over your head to create a stable family environment where you can have a family home for a decade or a decade and a half where your kids can go to school nearby where they can create friends and generally create an environment that you wish to consider home? That if you're looking to do often the answer is better to buy. It allows you the ability to put down your roots and be in a position to create as I said that family environment in which you want to raise your children. The trouble with renting in that situation is that in South Africa generally we don't get long term leases. In other words a five or ten year period in which you can put down your roots comfortably and having to uproot and move from home to home every year or every second year may be very disconcerting and very difficult for a family. So first and foremost my view if you're looking for a family home the best is to buy. If you're looking for other kinds of investments one could rent and put that capital that you might have put into property into other investments again that's a personal choice and understanding your own motives. Me being in the business I would be looking to buy. Next question how do you know if you're buying a property that will grow in value? So in general over the 35 years properties across the board have grown in value. You've had capital appreciation over a period of time. As I said earlier if you purchase in an area that has got the history of good capital growth it's likely in the future that that property will grow in value as well. But as I said before you need to understand that property goes in cycles. So at some stages homes with big gardens and big properties were growing much quicker. Then there was a move towards moving into smaller more compact homes with less ongoing costs and maybe greater security. So the bigger homes started growing at smaller or lesser capital appreciation than the smaller ones. We're now seeing a little bit and I say a little bit of a swing back in that people are saying I need a bit more space because I now maybe don't need to go to work every day and I want the extra study and the extra room and a garden to go to go out into if we're for example experiencing the lockdown that we have had. So things are fluid and they do change. The one thing that I can be quite confident about is that if you are buying a property for the long term it will grow in value and I think that's an important aspect when understanding your objectives and your motivations right up front. Question given how buyers have access to much more information now compared to 30 years ago how can an agent add value to the process for a buyer today? Well my belief and I have been in the industry for 35 years is that an agent can offer great value to a buyer and a seller on an ongoing basis. Now these days yes there are places where a buyer can go and compare properties that have bought that are on the market. A lot of that information is available to the public now online and they can go and determine from themselves exactly what has actually happened in the market but do they know the background story? Do they know why a certain property was sold for maybe 10% less than market value? Maybe that seller was in a great big hurry. Maybe that seller had to sell in order to take up a job in another city or another area. So whilst that information is available now to buyers the background information and advice that an agent can provide to a buyer and the assistance in terms of helping them make the correct decision is not in black and white and imprint or digitally available. You need an experienced agent who understands what has happened in their area, who knows all the properties, who can give you advice to assist you. Information and of itself is available but understanding and processing and working that information to the value for a buyer can in my opinion only come from a good experienced agent. Use them, they're there, they're ready to help you, they're ready to assist and give advice. What are some good questions to ask an agent when looking to buy a property? So obviously the first and foremost is to ask your agent about the area in which you're looking, the pluses, the minuses, the important aspects that maybe you haven't considered which they would know having been in an area, having potentially lived there, have been working and selling in that particular area for many months, years and in certain cases even decades. Then when you come to actually looking at a specific property that you're interested in, yes you want to understand why is the seller selling, what kind of interest has been, how long it's been on the market, what are the potential concerns on the condition of the property that you should have because the agent would have needed to ask from the seller what about any defects in the property, any issues that need to be raised that need to be shared with you as a buyer. So you need to be asking specifically some of the questions that go around zoning, potential buildings around you, can the other properties be torn down, rebuilt, views lost, etc. So a good experienced agent will have all the answers to those kinds of questions which will give you more comfort when wanting to make an offer for that property and actually to acquire it. How have buyers needs changed over the past 35 years? So again, that relates to the changing cycles as I discussed earlier at one stage the big normal element in South Africa was to have big suburban homes, big gardens, swimming pools, etc. Then that's changed to more compact buying, buying in security estates, neighbors much closer, focusing on safety and security, shared facilities, shared swimming pools. You don't have the cost yourself, etc. And it tends now to be moving a little bit towards going back from also having been in terms of looking to buy close to the city centre and the working more into shall we say, not quite rural but decentralized areas. A lot of activity happening along the coastlines, the areas of the Quasulunatal North Coast, buying in the garden route, buying in in Hermanus. So we've had seen a lot of shift of people over the years moving towards these coasts and these coastal towns have started building up and developing over the years. The next move may be back into the cities again and buying apartments and renovating and fixing up. Properties fluid, the needs and demands of individuals will change and they have done so. The one thing you can know for sure is that certain areas that have always been top grade properties such as your top areas in your seafront areas, your Clifton, your Bantry Bay, your Bellito, your Omslanga, those areas have been popular for many, many decades and will continue to do so going forward. Has the financing landscape changed over the past 30 years when it comes to securing a bond and what is the best approach today when seeking finance? So as I indicated initially, this is a very important aspect is for you to understand your financial possession. And as I said earlier as well, interest rates are the lowest. So you want to take advantage of trying to seek a mortgage bond which can assist you in purchasing your property as we speak today. One of the areas that has changed and we've had compared to 30 years ago, a major freeing up of capital. So in 30 years ago, one had great difficulty in obtaining mortgage finance to secure a bond. Now, virtually, if you have a good credit record and a good confirmation of job employment, the likelihood is the bank will be prepared to lend money to you. So what do you need to do? You need to ensure that you do have a good credit record. If you have any blemishes, you need to go back and try and repay back any tax and try and ensure that you can clear up your credit record so that a bank will view you a lot more positively than otherwise. The best approach today when looking for finance in my view is to go, as I said earlier, through a mortgage originator. They will give you different options. They will seek out the best financial opportunity for you from a number of the institutions rather than just one and generally will ensure that you'll be able to receive the finance you're looking for at the lowest possible rates. So thank you very much for joining me for the last half an hour. I hope and I trust that I have imparted some advice that I've learned over the last 35 years that will assist you when looking at your property investments. As I said right up front, property can be very rewarding. It can add a tremendous amount of value in your life, both as a physical space that will house your families and allow them to grow up and to hopefully equally at the same time as a good investment. If you have any further questions or anything else that you wish to ask of me, please feel free to contact me on Samuel.seef.com and I'm quite sure that I'll be able to put you in touch with one of my agents around the country to give you more personal advice in your particular area. Thank you once again and I trust you learn a lot throughout this virtual show. All the very best.