 Good evening and welcome to episode 303 of the Private Property Podcast. I'm your host, Usamantua Kumalo. So Thursday edition of the Private Property Podcast, and if you're joining us for the first time, welcome to the only Daily Property Podcast in South Africa. Do make sure that you go to our Facebook or our YouTube page to catch up on all the great content that we have already had. To all our regular viewers, welcome to it. You know how we do it every single weekday. You and I have an appointment where we always tackle a hot property issue with an expert who helps us navigate our journey. It is a freezing, freezing evening in Johannesburg today. I know a lot of people, all of us are just complaining if it wasn't the polar, it was also the wind. I saw that in certain parts of the country there's even a bit of snow, so I know lots of us are just feeling the pinch right now. You can see I'm even dressed for the elements because that's just how cold it is this evening. But of course you can, you know, one of the great things about the show is we're going to keep each other company, keep the conversation going down here below as we tackle media residential property strategies to consider in 2021. But before we get to that, you know that you can tune into other great shows that we have across private properties social media platforms. As it is a Thursday, you can look forward to the farming podcast with award-winning farmer Kimbali Mwago. And that also comes to your screens every single Tuesdays at the same time. And every Mondays and Fridays Chad takes you through exquisite properties that you can find on www.privateproperty.co.ca. And so do make sure that if you are in the market for a property that is a show you want to tune into. And that is the home shopping show. And every Wednesdays, Estie Carson is always in conversation with people who've not only walked that first time home buying journey, but have gone on to grow their property that follows from string to string. You can catch her every single Wednesdays at 8pm. Then of course there's us we're always together every single weekend at 7pm. Obviously always making the property so-called better. Doesn't matter where you are in your property journey, this is the show that can help you navigate to make better property decisions. And this evening one of the things I think the thing that I'm very excited about this evening is that we are in the middle of the year and there are certain people who want to get on the property bandwagon. There are certain people who want to sort of re-evaluate how they're currently running their property business and managing their portfolio. So really going to be looking at strategies that you can put in place in the event where you either want to get on the wagon or be you're already here, you're already on the wagon, but you certainly want to get better strategies to help you along the way. And then one of the great things about this particular topic being today, we saw that the Reserve Bank had interest rates remaining unchanged. I know many of us were waiting and waiting with because we thought that they may potentially increase it, especially because the last time they made the announcement they said that they're very likely going to increase it in the next sitting, but they've remained unchanged. So if you're still looking at getting into the property space, we're certainly going to be talking to that. And to help us better get a sense of what strategies we can use to get started with our property journey, we'll certainly better run and manage our property portfolios. I'm joined this evening by Candice von Begg. No she needs no introduction. Candice von Begg is of course co-founder of Property Pick. Candice, good evening and thank you so much for joining us. Good evening, Zahmat. Thank you for having me. Always good to join you on the show. It's always such a pleasure to have you Candice. And I think one of the great things with having you on the show is you're someone who does property. You're a property investor, you're managing a property. So you've certainly learned quite a lot in the past few years being in the property space yourself. You know the different fears and reservations that somebody who's looking to join may sometimes have. And I first want us to look at, you know, it is the middle of the year. Let's perhaps just look at an overview of as it is the middle of the year, we've heard of course that the interest rates are going to remain unchanged for people who are still on the fence. We're still not quite sure why they should get into property. Let's look at why property before we look at the actual strategies because we're going to get into that now. Why property? Because I think some people just don't know, they don't quite see the benefit. They're still trying to get a better sense of why this particular asset loss. So first of all, I think it's really good news. I agree with you the fact that the interest rate remains unchanged. So for those people who are still sitting on the fence and wondering if now is a good time to high property at Easter and opportune time. So it's good news for us to know that the interest rate is not increasing anytime soon. And obviously we will monitor that situation, but it's positive news for property investors. And then also, why I believe property is really an awesome investment strategy is because properties also considered to be a low risk investment strategy. And one of the reasons for that is because with a property, you can feel it, you can see it, you can hug it. It's really something tangible. So it's something that exists. And also it's considered to be a low risk investment strategy. Now, I'm not necessarily going to be focusing on all of the reasons why it's considered to be a low risk investment strategy, but rather what I want to focus on is that I believe that there's still an opportunity to get into the property market. And especially at this time, some of you may be looking at yourselves, it's mid-year, July, we're moving into August and you're probably thinking to yourself, have I achieved my financial goals up to this point? Is there still an opportunity to increase my income before the end of the year? And I want to say to those of you who are still wanting to increase your income before the end of the year, I think now is the right time to definitely consider investing in property. But like any investment strategy, we have to do our homework. So we need to know what's happening in the market before we get into that strategy. So I like what Robert Kiyosaki says. He says that knowledge is money. So it's important. Yeah. And I think Candice, when we look at, because you've just mentioned it and I love this idea of doing your homework, right? When we look at then doing your homework, because one of the things that I know many people tend to do, I did it when I started off in our property journey somewhat. Anyway, I started researching when I was still much younger, so sort of 22, 23, only really got serious about buying a couple of years later. And even there, it was just like a soft thing where there wasn't a concrete plan as it were. So I roughly knew numbers. I knew which areas were solid areas to get into. And so when I first bought those first three properties, I know that I also just didn't go in it with having done my homework thoroughly. I mean, I did it a little bit. So I did it well enough to be able to, you know, when you're in class and the teacher asks you something, I did it well enough to be able to answer some of the positions, but it wasn't well enough to be able to answer all of the questions. And I think it's so important that at the very least, you want to be able to get an A, right, when you do your homework, because there's just certain fundamentals that you want to get right, even when you're doing your homework. So when we talk about doing your homework, Candice, what do we mean? Because I think it can also easily become overwhelming for somebody they may not know what the starting point of said homework actually is. So what do we mean when we say you're doing your homework, especially for those who want to get into the property market? Okay, all good. So there are two things that I want to start with. So the first thing is you need to decide what strategy you're going to be pursuing. Okay, so we understand that there are multiple strategies, but you need to ask yourself, am I looking for additional monthly income, or am I looking for lump sums of profit income? Now, if you are looking for lump sums of profit income, then of course, buying and selling would be a good strategy for you to consider. So buying property at a good price and then selling it at a profit. If you are looking for continuous monthly profit income, then of course, we know that you need to look at properties where you're able to rent it out to tenants and then, you know, collect positive profit income every month. Now, I want to understand what type of income you're looking for and also what strategy you want to consider. And we call the buying and selling capital flips. And then, of course, the rental strategies can vary from student accommodation to ultilets to buy-to-lets. It really just depends on the investor and what strategy you want to pursue at this time. But part of doing your homework, ladies and gentlemen, is that you also need to ask yourself, you want to invest. So which areas do you want to invest in? If you are in Haoting, we're in a Haoting. If you're in the western Cape or if you're in Bumulanga or you know, wherever you are today, ask yourself which part of that particular province do you want to invest in? And then one of the things that you need to do is then you now need to really get information in terms of what's happening in those areas. And generally, when I work with my coaching students, I say, start with the areas that are closest to you. So sometimes we don't have to go across borders or, you know, into different provinces. You can even start where you are. Each one of you is surrounded by a few suburbs or a few townships or communities. Go into those areas and see what's happening. And I think that's a start. Also, I want to say to you is that get as much information that you can on the particular area. So one of the sites that I'm subscribed to, and I'm sure some of you are familiar with it, is Lightstone Prox. I'll share the details with you in the chat box afterwards. But those are really good sites to subscribe to. Subscribe to the platforms. Property pick also one good platform to subscribe to. You can subscribe to the newsletters. And I think it's important to stay connected and stay close to the fire because we get a lot of insight from some of these platforms. And I'm going to be sharing some really interesting information that I've read with regards to the property market and where the opportunities are and what strategies I believe will work best considering the information that I've received. I don't know if there's anything that you want to ask about that, Zama, before I move on. I actually wanted to ask a follow-up question on the area research because this is one of those things that I am also a bit of a stickler for. And there are different ways or different data sets that I like looking out for when it comes to the area. And I know that we could probably spend another 30 minutes just looking at some of the things you should be looking out for when you're doing your area research. Some of the things that could be red flags, green flags, perhaps share one of the maybe two key things that you should that they're part of you that you can be looking out for. But share with us two key factors that you should probably be looking for or looking at when you're doing your area research. Okay, so these are some things that you've got up in a paper. You're welcome to note some of these things. But as part of your area research, it's important to understand what properties are in high demand in those areas. So you can talk to the local estate agents, the local property brokers in your area, and understand what properties are in high demand. So when you talk to them, you want to know is it one bedroom apartments, two bedroom apartments? Is it three whole houses, two bedrooms, three bedrooms, four bedrooms? So get the specifics in terms of what is in high demand. So what are people buying in those particular areas? So once you understand where the demand is, you now know that that's where you need to, that's where you need to focus on. Because you don't want to buy properties that people are not buying and you also want to buy properties that people are not renting. So while you're talking to the estate agents and the property brokers in your area, and I would normally say talk to about three to five different estate agents. Also talk to three to five different letting agents and understand also where people are renting properties. Because the assumption that people are just renting properties in any area is not a good assumption because that's not how it was. In most areas you will find specific areas where people generally flock to and this is where they want to rent properties from. And there will be various reasons depending on the category of tenants that you are dealing with. But I think that's number one, so understand what is in high demand. And then the second thing that I think is very important and this is going to support you with your numbers as well is understand from a buying perspective. So people are buying properties in those areas. What are those properties selling for? So you need to understand that. So are they under 700, under 500,000 or are people generally buying one million, above one million rent? So you need to understand what those properties are selling for. So if your agents are saying two bedrooms are selling in this particular area as well as three bedroom houses, understand what those different types of properties are selling for. And at the same time also on the rental side. So if people are renting property in a particular area, a particular part of that city, you need to understand what are the rental amounts. So what do people pay for for those particular property types? Once again, if it's bachelor units, if it's two bedrooms, three bedroom houses, you need to understand what the potential income is that you can expect on those properties. So I think, you know, it's important to know that as investors, we need to follow the money. So we need to understand where the opportunities are. And that's what we need to focus on. And remember, you're not buying for yourself. So don't look at property and look at it from an emotional perspective because we're not buying property for ourselves. If you're buying a personal property for yourself, of course, you will make your decisions differently. But if you're buying property for investment purposes, then you want to ensure that you are buying in the right areas where the opportunities are where the demand is. And I absolutely love that last point that you've raised, Candace, that we shouldn't be buying for ourselves, right? You can be emotional when you're buying property where you're really searching for your home and you know that you're going to be living there perhaps for the next, you know, 10 years, you want to raise your family there, then you can get a bit emotional about that. And perhaps even you want certain kinds of finishes or even when you're renovating, go slightly over the top. And I say slightly on purpose because you also don't want to put down too much money even in your primary residence. But the moment you are buying as an investor, you have to put on a different hat and all the emotional decisions of thinking, oh, this is just such a great view, you'll pay premium for it. All of those things absolutely needs to go to the side. So now that we have a good sense of, you know, area research and as I said, this is one of those topics that we could probably easily do a masterclass on because there's certainly different components and data sets that you need to be considering when you do your area research, then what would be the next step, you know, especially Candace, for those who are looking and briefly will look at people who are already in it. But what would then the next step be for people who are looking to get onto the property market in terms of the strategies that they should be looking into for the second half of this year? Awesome. So I'm just going to give you a view, obviously, because I mean, everyone here is that's listening today, that's watching is from a different area. So I'm not too sure what's happening in your specific area. But I just want to share with you some general insights that I want you to consider, you know, as you're going out there into the different suburbs in the different townships and doing your research, understanding what's selling. I think, you know, what I want to share with you, so as part of this Lightstone article that I just read recently, what it says here is that by the time this particular article was written, which was literally a few days ago, there were 700,000 new homes added to the property market. Okay, now that's a that might not sound like a big amount, but for property investors, that is an opportunity. Now, it's important to understand where where are those 700 properties currently being sold. And what I want to share with you is it's quite interesting if you look here. So I'm not going to go through all of the stats, but they focus on the under 700,000 rent properties. And then there's also 700,000 1.5 million, sorry. And then there's 1.5 million to 3 million, and then also above 3 million. Now, I've spoken to some people who want to get into property investing. And obviously, some of them may have access to the bank's money, and some of them also have some of their own capital to get started. And they generally think that they need to go for the highest amount. Okay, and that's not necessarily the case. Once again, you need to see where the demand is. Now, just by looking at this particular table that I'm looking at here, if we look at if we take Eastern Cape, Freestake, Hotei, Quasulunatal, Lampopa, Mpumalanga, Northwest Northern Cape, and then also Western Cape into account, you will notice that most of the properties that are currently on the market are under 700k. Now, okay, what do you do with that information? It's under 700k. The next price category there is 700k to 1.5. Okay, so that's where the most properties are currently being listed at the moment. Now, if you look at a different and I mean, each and any one of you will be able to go onto the site and get the information yourself. As I said, I'll share with the link with you afterwards. But if you go and look and see where most of the properties are being sold, it's interesting to see that most of the properties that are being bought are under 700k and then also between 700k and 1.5 million. So I'm not even going to go into the other categories because the numbers decrease the higher you go. So what is that telling us? It's telling us that the opportunities are between 700k and then 1.5 million price bracket or selling price bracket and then also under 700k. Now, this is not necessarily going to work for every area and that is why I say it's also important to go into your particular area and see what's happening in your area where the demand is. But generally, you will find that between under 700k and then up to a maximum of about 1.5 million is generally where the demand is. So that means that most people can generally afford properties within that selling price category. So for those of you who are asking yourself, okay, if I want to buy a property and sell a property, that means you need to find a property that you are able to buy below what the selling price is so that you are able to sell it at a profit and that is what we would call a capital flip strategy. If you are wanting to buy property then and keep it for rental property, it's important to ensure that you understand what the potential rental income is on those properties. And then also, I think it's important to also ensure that you buy at the right prices because if you buy at the right prices, that's going to support you down the line because should the market shift in any way, let's say for example, interest rates go up in a couple of months or in a year's time, you want to ensure that you're still able to collect profit income or positive income on those properties. So be very careful in terms of how you run your numbers. I know it's awesome to hear that the interest rates remain the same, but I always say let's work in that risk element there because we know interest rates will eventually increase at some point, maybe not just yet because of where the economy is, but it's important as a property investor, anticipate some of those increases maybe in the next year and two years. So when you buy your property, ensure that you get the lowest price that you can possibly get on that property. Understand what your market value is on those properties because that will also determine what type of offer you can put in. Many people don't even know that they need to check the market value. They just see what's listed on the various property sites and they think that's generally what properties are selling for, but ensure you also pull a market valuation report on those properties so that you can see what the real price is in terms of what properties are selling for and that will also guide you. And that's such an important thing too to always take note of. I am this evening in conversation with Candice van Vekers. We look at media residential property strategies to consider for 2021. We've been focusing quite a lot on people who want to get their foot in the property ladder and we're going to focus in a little bit on people who are already on the property ladder and perhaps want different ways and strategies to better manage their property portfolio. We are taking your questions and comments this evening as we look at those strategies and we've got one coming through on Instagram saying good evening, how has the current unrest impacted the selling and rental platforms? And I know it's such a short period Candice and I'm in quite a number of different property groups and some are with property professionals, some running, some of the listed companies, some of the listed property companies. Have you picked up any trends in terms of the rental or certainly when it comes to the selling due to the recent unrest that you've seen? Yes, I mean firstly that was really a terrible thing for our country to experience. I'm glad things have really settled down a bit and you know for those people who suffered I really hope that you will be able to pick up the pieces and be able to move on from here. But I think it's too soon really to allow that to impact the decisions that we make with regards to buying property. So I think yes, understand maybe you know where a lot of the looting has taken place. I think it's mostly been in Quasaluna, Dal and Haute regions. But as part of buying property you need to still be focused on where the demand is. So remember people will be buying in properties generally where it's affordable, people are also looking at security and also depending on what strategy you're going to be pursuing. For example, if you're just letting out a property to professionals versus students or maybe young couples, you need to also understand who your client is, our tenants, our clients. We need to understand what type of client we are dealing with and also what they are looking for and we then need to ensure that we're able to meet some of those needs obviously within you know the numbers that you have that you are working on for that particular deal. So I think still look at the demand and allow that to guide you in terms of where the opportunities are. But if you don't feel comfortable in a particular area and I mean we've heard this probably from myself or even other property trainers, if you are not comfortable buying in a property or if you are not comfortable letting out your property to a certain tenant then don't do it. I mean I recently had a situation where I met with a tenant and you know we discussed the property and also what it was renting out for and we started engaging in terms of what they're looking for and I just didn't get a good feeling about the tenant you know and I then decided that I wasn't going to move forward with that particular tenant and after that I found a tenant and I was able to place the tenant so sometimes you also need to follow that gut and especially you know obviously if you are only starting out I would say definitely work with a rental agent but because I'm a little bit more experienced I am able to work through that process myself and you know when you start asking for certain information and your tenant is not able to provide it or there's one story after the other then that starts you know red bells or red alarm start going off you know red alert start going off. So remember if you are big enough you're starting out I would definitely encourage you to work with a good rental agent but for those of you a little bit more experienced I mean we know that if tenants are not prepared to share the information that we need in order to vet that particular tenant then don't take the risk and put that tenant in your property because some tenants actually understand the rights that they have at this time and you don't want to be in a situation where you have to go through an eviction in order to get a tenant out of your property so make sure that you work with the right professionals and also make sure that you vet the information even if I am working with rental agents I still ask them for all of the information because I also want to view what I want to ensure that I'm happy with the type of tenant that they are putting into my property because remember for me it's an investment so I need to look after my investment and that is why you need to ensure that you also understand the process understand the documentation involved review the documentation if you don't understand ask your rental agent to explain it to you so that you know what you're getting yourself into. And Candice then I wanted to you know quickly switch gears to people who already have some investment properties what strategies can they be or not even what strategies should they be using how can they best better how they manage their property portfolio for the remainder of the year because I think with many you've probably already been managing your portfolio even when of course you're working with an agent but you have a portfolio that you are managing and it's now in the year perhaps looking at what should you be looking up for and how can you sort of better manage your portfolio going forward. Yes so one of the things I would definitely ask you is are you able to maximize the income on that existing property so ask yourself are you able to maximize the income what do I mean by that so I mean are you able to apply a different strategy so for example where you maybe have a buy to let in place are you able to convert it into a multi-let so that you're able to generate you know more income or additional income as part of that strategy are you maybe able to subdivide a property and then rent it out as maybe you know a cluster type unit so we need to look at creative ways in terms of how we're able to maximize the income that we already are collecting as part of our investment portfolio and then also if you find that maybe you have a property in a particular area and generally you find that there's not really demand for the type of property that's up for rental have a look at the other properties in your area and understand why maybe your neighbor down the street is able to get you know three to four tenants renting their properties but you're struggling so we also need to adapt ourselves so if you are renting out for example to young adults I mean we understand now that we need to ensure that you know we have got either you've got fiber cables laid in your area or it's a good area for for internet connectivity so there are different different things that appeal to the different category of tenant that you will be servicing so it's important to understand what they are looking for and I think you know even as an existing investor ask yourself are you maybe able to go on to that next strategy you know you've done capital flips you've now done the buy to let's are you able now to move on to multi-lits on to maybe starting with smaller developments and you know progressing from there so don't be afraid remember when we get started every strategy that we get started in you know our heart starts pumping faster because it's something new it's something unknown to us but because we've been through it before make sure that you get as part of that next strategy let's say you've identified a vacant land in your particular area of investment and you're able to maybe bring two or three or four units onto that piece of property start now getting the right information that's going to support you in terms of getting that small development up and running so ultimately I mean sometimes your goal some people just go straight for the kill we've got different you know investors and people have different risk appetite some will start with smaller development deals some will move on straight to bigger development deals but I will definitely say start challenging yourself because obviously you're looking for additional income so not it's not time to move on to bigger deals and the opportunities are still here because we know the interest rates are still favorable we know that properties are coming onto the market I mean whilst we know that people are obviously selling properties because either you know they've they've lost part of the income or maybe they're downsizing whatever the reason is people are also moving for other reasons people are moving for other reasons some people want to get away from the city so now they're looking more for properties on the outskirts of the cities so you know start looking at opportunities like that and see if people are moving away from the city and you are able to tap into a nice piece of land there is there an opportunity for you to develop that land you know and and and then sell it as a as a capital strategy so in this case there'll be lots of learnings at the same time but I mean you'll be able to generally make healthier profit income as part of that capital strategy so I'm challenging you start looking for bigger deals and you know just get out there and take advantage of the opportunities because there are opportunities on the market I absolutely agree with you on that and I think that's such a great notice to leave it on I'm going to share a comment by one of the top fan gang members on on Facebook about the same great practical lessons do your research and it's so important that regardless of which strategy you decide to choose do your research make sure that you are clear on you know what the next steps are if you're really a property investor continue doing your research continue you know investing in yourself and finding ways that you can optimize the current properties that you have and exploring how can you then go about you know firstly better managing your portfolio and then of course growing your portfolio Candice we're going to leave it there this evening thank you so much for joining us it's always such a pleasure to have you on the show awesome thank you so much Summer I really enjoyed it thank you and that is Candice van Veek who's a co-founder at Property Pig wrapping up the Thursday edition of the private property podcast with myself you can look forward to the farming podcast with awarding in Farmer Umbilean while at 8 p.m. I'll be back on your screens tomorrow evening at 7 p.m. until then hoping you're staying home and staying safe