 Good evening. Welcome to the private property podcast right here on our Facebook page. My name is Tumi and I am your host. If you are joining us on the Twitter space is a special shout out to you. Hope you stay tuned till the end of the conversation because tonight we are bringing you a very interesting topic. As usual, I have a guest who's going to chip into the conversation and give you the necessary information for you to make a wise decision about how to grow your property portfolio and overall make it work. So tonight we are talking property valuations and I'm joined by Estee LaRue. Estee is the manager of valuation strategy at Secure Lending Cluster. Estee, good evening. Good evening to me. Hope you've been having it. It's a pleasure. Thank you for joining us. Hope you've been having a good week and everything's been going great on your side. Yes, yes it's been a new. Have you been proud as well? No, absolutely great. Thank you for joining us. Tonight we're talking property valuations and our Facebook family and the people who are following us really want to know when we're talking property valuations, what does this mean? How does it look and how often does this have to happen? Just before we start to the conversation I was asking you, is this something I need to do every year? So just take us through the process of property valuation and how that works. Okay, great. So property valuation does not necessarily have to happen every year. I think it is important for everyone to understand the value of the property, especially if you want to make use of the equity to invest in another property maybe. And also when you want to advertise or put your property in the market, it's important to understand the value. So property value is, determine the value. They registered professional values with the South African Council for the property value is proficient. The council, one of their functions is to protect the public in their dealings with professional valuers. So we have a code of conduct which we must comply with to ensure that the public receives quality valuations when they do employ the services of a value. We also comply with the international valuation standards. The valuation standards defines the various methodologies of valuations that we apply. And it also gives us guidance on what methodology to apply when and how to go about doing this. Sure. And a lot of times people just value their property by coming onto private property, for example, and just looking at what their house would cost. Like if they live in a cluster in an estate, they just check how much someone else's house is and then think there's the same. Let's talk about houses that are in estates or clusters or even apartments. There's a lot of things that people can do these days to increase the value of their property. Is it the case that you could find one house that the value ranges highly compared to other houses in the same estate? So from a section of title perspective, you will find that properties or units similarly in size and layout will get the same purchase or have the same value or obtain the same purchase price in the market. So if you have a sectional title unit, you situate it in a complex and you're fortunate enough to know what the selling prices of similar units are in the same complex, then you are able to make a good estimate of what your property should sell for. It's just important to understand that finishes also play a role. So size, you can definitely consider where the unit is located. Also can have an impact. For example, if it's a four-story building without lifts, people might be reluctant to climb stairs every day and they might prefer a ground unit and those units might be valued a bit more than, for example, a third floor unit. So it's important to understand the variables that impact value, but sectional title is easier to compare than, for example, three-hour property. Three-hour property, every property is different and it's unique and there's various things that you need to consider when valuing a property. For example, the room count, the layout of the property ingress and ingress are easy to get to the property. Safety plays a role. So it is more popular these days to buy in an estate, but it's also expensive because there's levies that you have to buy. So there's various considerations when you value your property that you need to pay attention to. Sure. And as a homeowner, who can I trust to come and value my property? You spoke of methodologies and different ways that are used in order to evaluate the property or to check the property's value. Who can I trust? Can an estate agent come in? Can a property value come in or is it just something that anyone can do? No. So according to the Act, you have to conduct a property valuation, a formal signed valuation. You have to be a registered property value with the council, which means you enrolled into the necessary programs that is approved, the degrees or diplomas. You register as a candidate, you gain the necessary experience and then you can move on to becoming a social professional or professional value. Is estate agents very importantly or have a very important role to play? They advise customers and they understand the neighbourhoods in which they operate. So they are able to estimate or give estimates to owners and advise them at what selling prices they would attract buyers. But if, for example, you need a formal valuation for court proceeding or sales and execution, then you will call upon the services of a professional value, which will give you a signed valuation. I think there's various roles and each of us estate agents as well as value has an important role to play in the industry. No, definitely. And thank you for that. You know, there's this question that keeps on coming up in most of our discussion where we talk about location. You know, in the property industry, location is something very, very important and it's very pertinent where someone buys or if you are looking to invest and all of those different details. What happens when we're talking about valuation? Does the value of a property increase potentially or even decrease because of the location it's in? Definitely. I think the old adage remains through location, location, location. Buying the worst property in the best neighbourhood is possibly a better investment than buying the best property in the worst neighbourhood. So the demand in the area is impacted by the popularity of the area. So are there services, the municipal services in that area? Is it reliable? Does the buyer perceive the area to be safe? What is the appearance or the corporate appeal of the area or the neighbourhood? Is the earths of the different properties well kept? Is the neighbourhood neat? All these things impact the popularity of the neighbourhoods. So if people want to stay in an area, the demand will increase. If there's an increased demand, sellers would be able to sell at a higher price. When there are certain factors that can impact an area negatively, the demand will decrease and the prices that people are able to get for their properties will also decrease. So to attract buyers to an area that is declining for whatever reason, the sellers would need to drop their prices, to entice these buyers to buy in that specific area. So it is important. Area remains important from a property valuation standpoint. Great. Thank you so much. And when we're talking area, let's also talk amenities because after a location, we talk amenities. What about the amenities? Because they are not necessarily secondary, but they are not part of the property. And when you're evaluating a property, I think it's only fair maybe we look at the property and not the things that are surrounding it. So just let's talk a little bit more about that and give us professional advice around this to say, do the amenities play a role in terms of the value of the property? So amenities can mean two things. It's either the offerings of the property office or the, for example, schools, hospitals in close proximity to the property. So both play a role. If I've got kids, I would like to stay close to school. If I'm old, if I'm aging, I would like to stay close to the hospital. So all these things play a role at different stages in life. So it's also important to understand when you're buying a property, what are your needs and that will influence where you want to buy a property. So I think you will note that certain areas, there would be demand by older people because it's close to hospitals, today's health care services, etc. Younger people might live further away in smaller properties or startups. So amenities and near schools. So amenities plays a role from a property perspective. What do we consider from a property specific perspective? Not necessarily talking around the area and amenities in the area. We look at the accommodation offered by the property, obviously. Then the layout, does it make sense? Do you have to walk through the main bedroom to get to the entertainment area? You will note that some of the properties you'll see that they added over time and the layout doesn't make sense anymore. So that can also have an impact on the value of the property. Then compliance with municipal bylaws is very important. I will never buy a property. My personal opinion is I won't buy a property if I'm not sure that there's or if I have not been provided with approved municipal plans for that property. I think it's important to understand if you convert, for example, a storeroom into a unit, there are certain bylaws that you have to comply with. So bylaws differ from municipality to municipality. But that conversion might impact the zoning which needs to be amended or changed to make the second unit that you have on your property lawful. And also to get the approved plans. And when you apply for a bond, you have approved plans to provide to the bank if they ask for it. So I think compliance with municipal bylaws is also important. Then the condition of the property, maintenance, the size of the stand, I'm mentioned, the size of the improvements and the placement of the property on the earth is also important. Finishes, type of finishes applies a role and the age of the property. No, thank you so much. You were talking specifically about a freestanding house and you know, a question just sprung to my mind now to talk about the land that the land that the house was built on. Does that play a significant role in terms of increasing the value of the house to say, oh, we've got ample space in the yard? And because these yards are really sectioned by the municipality, how far can one take improvements when this was concerned? So from a perspective from building on a stand, they certainly gain municipal bylaws which you have to comply with. The coverage must be compliant with municipal bylaws as well as the floor area ratio. So if you want to build on a stand, you must just make sure that when you get an architect, obviously they will make sure that you comply with the various bylaws. So it's important or a draftsman will assist you in that regard as well. The value of a stand, it depends again on the area. A simple example would be if I have a stand that has the view of the ocean near the coast, that will be more expensive than a stand at the back that doesn't have a view of the ocean. If you build exactly the same improvements on both stands, the one will still have more value because of the view it offers than the other property. Size of stand, I think it depends on the type of person that buys the property. These people that prefer lock up and go, it depends on your lifestyle. I think something important that we need to consider when we look at stand sizes of the costs, that municipal costs that are increasing. If you've got a huge stand consideration around water, watering the garden, watering rows, etc. If you're dependent on municipal services, that might be expensive. Just upkeep maintenance of the garden could also be expensive. A huge house, electricity bills. So I think when you buy a house, it's not only consider the purchase drives of the property, but consider the maintenance costs and the upkeep of that property. When you calculate whether you can afford a property or not, I think you must just consider all the costs relating to a property and then make a decision. Sure. No, thank you so much. Such valuable information. And if you are only joining us now, we are talking property valuations and we're joined by Esti LaRue. Thank you so much to everyone who is interacting with us on the socials. We really, really appreciate that. I have special shout outs to Glad, to Polina, to Anelda. Thank you guys. We see you there. We see Bongani as well as Queen. Thank you guys for always coming through and really just engaging with us as we are live. If you think that this information is something really important and you'd like to share it with someone, please copy the link and share it with anybody you believe would benefit from this information. And if you are in the market to get a house or you're looking at selling a house or you have different investment property that you would like to maybe trade or whatever the case may be, think about property valuations. That seems like a very important thing to do and a step that you shouldn't probably skip. So come back to our conversation, Esti. I want to know now with the investments coming up and all of us really looking at those people who have invested in property. What can you do at different points in time for you to grow the value of your property? Because one of the things that investors want to do is to ultimately grow the investments. So what are those things that a property investor can do to grow the value of their property? I think it's important to consider the area that your property is located in. What is the nature of the area as I referred to earlier? If the demand in that area is for a two bedroom home and a two bathroom home and you build a six bedroom home with four bathrooms, you might be at risk of not being able to get the sale price that equals the investment you made into that property. So I think firstly when you invest it, understand the area that you bought in, understand the demand of that area. So what is popular in the area? What do buyers want to buy? Do they want a swimming pool? Do they want to be off grid? Do they want to have a large yard, etc. So and I think estate agents there has a very important role to play to advise customers to ensure that when they renovate or make changes additions to the property, the estate agents will be able to guide them on what will increase the value of the property and what will increase the marketability of the property. Features like a black kitchen for example, it might appeal to you but when you market the property you might find that it does not appeal to the wider audience or the wider market. So I think it's important to understand the area and the demand in that area and what what do buyers want in essence when they look at the property in that specific area? No, definitely. Thank you so much Estie for talking to us tonight. Have a good evening. You too. Thank you. Bye. And just like that we have reached the end of our conversation tonight, talking property valuations, talking about how to know the value of your property, how to maintain the value of the property and how how to go about you know if you want to sell the property check that value because you don't want to sell yourself short. Thank you so much for joining us for tonight's conversation. We really really appreciate that you got to this end and if you're joining us on the Twitter Spaces, shout out to you. Thank you so much and have a good evening. Thank you.