 Good evening and welcome to episode 318 of the Private Property Podcast. I'm your host, Uzaman Dumwakumalo. It's the Wednesday edition of the Private Property. It's a Tuesday edition. Look at me, certainly jumping the gun. This week is actually feeling like it's already Wednesday. Every single day feels as though it's a week compounded into one. It's the Tuesday edition of the Private Property Podcast. If you're joining us for the first time, welcome to the family. You're tuned in to the only daily property show in South Africa, catering to your property needs. And all our regular viewers on Facebook, on YouTube, as well as on Instagram, welcome to it. You know how we do every single weekday. We're now having appointment at 7 p.m., we're always in conversation with an expert who helps us navigate our property journey. And it doesn't matter where you are on your property journey, where they're looking to find, to sell, to build, or of course you're a tenant and still looking to find ways of accessing the property ladder and getting your foot in the door, or of course a landlord who wants to grow your property portfolio as much as possible. We're here to make sure that you get all your questions answered and are empowered to make better property decisions. And talking about making better property decisions, you know, of course, you can catch a whole host of other great shows across private properties, social media pages every single weekday at 8 p.m. As it is a Tuesday, you can catch them by doing the farming podcast and she's on your screens every Tuesdays and Thursdays at that time. And every Monday and Friday's Chad brings you the home shopper's show, where he takes us through exquisite properties that you can find on www.privateproperty.co.za. And on Wednesdays, Estie Klassen brings you the first time home buyer's show, where she's always in conversation with people who've not only walked that first time home buying journey, but have gone on to grow their property portfolios from strength to strength. And then, of course, there's myself as I'm on my own on your screens every single weekday at 7 p.m. Always tackling the property issue. And you can make sure to follow myself as I'm doing my underscore K on Twitter as well as on Instagram. Now, one of the great things that you'll see on our Facebook page, that's the private property Facebook page, is of course the great competition that we are currently running, where you stand a chance of walking away with 500 rounds in cash every single evening. And all you have to do to stand a chance of walking away with that cash prize is to share with us some of the great property insights that you've picked up in lessons that you've picked up while watching the show. Comment on the pinned post on our Facebook page. And if we call your name, then you have to make sure that you drop us a message down here below to clean your prize. If the winner doesn't claim their prize, the money rolls over into the money bag. And of course, we do the same thing the following day. Now, unfortunately, yesterday we're not able to announce the winner. We do apologize for the technical glitches that we had. The unfortunate thing about load shedding is that if it's either I'm being load shed, you know, my technical guy in the background, my colleague girl is being load shed, or my guest is being load shed. One of us, if either one of us is being load shed, then unfortunately, it disrupts the program. And that's exactly what happened yesterday. And so today, if I remember clearly, you can put it up, I think we've got 1500 rounds actually in the money bag this evening. So if you call your name, you're understanding a chance of walking away with quite a significant amount of cash. And I do hope that whoever is the winner is going to be watching us and can walk away with that cash prize. Well, to get us started this evening on really great conversation that I've been looking forward to, we're going to be looking at why diversified property investment is critical to your retirement plan. Now, I know every time we talk about retirement planning, I always get chest pains because it's one of those things that reminds me that I am indeed an adult and we have to plan for these things. You can't wake up at 55 and think that would have miraculously happened. And so even though I'm in my early 30s, it really is one of those things that I know I need to be on top of as much as possible. Now to help us get a better sense of, you know, why this is so important and the different things that we need to consider when we look at diversifying our property portfolio. I'm speaking to Rianne van der Veiver, who's the Chief Investment Officer at Wild Migrate. Rianne, good evening and thank you so much for joining us on the show. Thank you. Thanks for the opportunity. It's such a pleasure to have you on Rianne. And then before we even look at, you know, the dues and loans and how to even, you know, best navigate our retirement plans when it comes to, you know, property portfolios. Let's look at what exactly is it that we mean when we talk about a diversified property investment? Because I think a lot of times we know about just diversifying your investment and it would have a good sense that property can also be one of the asset classes that one, you know, has within their sort of, you know, investment portfolio. But when we talk about the diversified property investment, what exactly are we talking about? Yeah. So I think the first thing just for the listeners, you know, if you diversify portfolio typically, you're looking at a combination between equities, bonds, let's say, money markets, listed property, and then of course, international. Where as if we talk about diversification within property, I think the first thing is that there's always a place in the diversified portfolio between listed and unlisted property. So what I mean by that is that typically a listed property would be something like buying a rent, you know, like growth point or high prop, or even for the, let's call it the typical man on street, they will have a unit trust portfolio that consists of a portfolio of rents. Now, typically, asset managers have quite a fairly low exposure to listed property. And that's where the opportunity comes in to increase your portfolio or their property exposure by using unlisted property. So and where we think unlisted property plays quite a big role is that, you know, in the listed property space, your returns are driven by news, you know, macro news. If Donald Trump said something, it had an impact on your listed property portfolio, or if the Reserve Bank says something, it has an impact on your listed property portfolio. Whereas unlisted property is far more driven by fundamentals, you know, at the actual valuation and the drivers of return, which we think is quite important. But apart from increasing your property exposure, you can diversify your property exposure by taking exposure to different sub sectors. And by that we mean, you know, you can look at residential and some other areas of residential you can look at is something like student accommodation, which is quite popular, something like co-living, which is quite a new investment or property strategy. And then what we think is very important for a typical South African is to gain more exposure to other sub sectors like industrial, commercial, retail, potentially old age care or retirement villages. And that's some ways that you can actually obtain diversification within your property portfolio. And of course, trying not to only have South African exposure, but also to obtain global exposure so that you get that diversification in your property portfolio as well. And you know, I think one of the things that are definitely on our conversation wanted to look at is how you go about identifying those opportunities that are not listed. Because I think with listed options, it's relatively easy. And even the data on different kinds of freets that you may want to get exposure in is not difficult to come by, you know, tracking the performance over the past couple of years or even the past few quarters is not something that's necessarily difficult. But of course, when we're looking at understood entities who are investing in property, I think that tends to be a completely different ballgame altogether. And if anything, I'm sure viewers at home are probably thinking that a lot of them would probably think, well, you know, is it as safe, for instance, as rates? And we mean that in the context of people just not feeling as though their money is being well taken care of, whereas a part of you feels slightly better when you're going for a read, because you also know of all the different kinds of we'll call it safety measures that are put there to make sure that you don't kind of lose your investment overnight. But before we get that, what is to explore the overlap that we typically find when we look at property investment and retirement planning? Because I think when we talk of property as an investment asset class or investment vehicle, a lot of people sometimes have misconceptions about it. Unfortunately, some thinking, you know, it's going to be a get rich quick scheme. And others not understanding that you can lose money if you don't make the right decisions or the best informed decisions. So when we look at property investment and sort of retirement planning, what are some of the overlaps that we need to fundamentally be aware of? Great question, as I'm a Tungua. So I think the first key point is that your retirement planning is a long term plan. So it is not that when you wake up 60, now you suddenly start planning for retirement. So the fact that retirement planning is a long term strategy, investment in property is also a long term strategy. Remember that an investment in property is typically illiquid. And therefore, if you do not want to make losses, you need to give your property investment time, which then matches this long time or long term strategy of retirement. I think a further important point is that retirement is nothing different than liability matching. And what do I mean by that? We all need to have sufficient capital to be able to retire comfortably. So in other words, we're targeting a certain investment called capital amount, or we're saying I want to replace let's say 70% of my salary at retirement. Now, one of the key characteristics or benefits of property investment is that income stream that you get from a property, especially if you're in the buy to let market or you're buying a property to generate regular cash flow from. And that makes it so attractive because remember retirement planning is emotional. So therefore, the fact that I have consistent income streams help to give me a bit of certainty if I can put it like that, that I can achieve my retirement goal at the end of the period, which we think makes it a very attractive asset loss to assist you in your retirement plan. And then I've spoken about this emotional thing as over to one, you know, when you look at what happened the last 23 years, maybe even five years with the equity market moving sideways apart from the last year, 18 months, very few unit transport portfolios with let's say an inflation plus benchmark achieve that benchmark. So even if you had the visitation, you couldn't meet a certain outcome. Whereas with property, what you're looking for in diversification is that you want different sources of return. In other words, different parts of your portfolio need to react differently during similar periods. And that's where property comes in, you know, with this stable income stream, it gets you what we call an uncorrelated or a low correlated return, which then means that it helps your portfolio to behave differently in certain circumstances. But more importantly, it brings a bit of stability to your portfolio, which then of course, sits very nicely with this emotional connection of retirement planning, because nobody of us like to see volatile results, whereas property as part of your retirement brings a bit more of stability to that portfolio. And I also think if I made just the last point, you know, historically, retirement planning was all about, you know, using products, in other words, a retirement annuity, and then having a few of the asset managers balance portfolios underneath it. Today, we need a more realistic, modern approach. And by that, I mean, you know, it becomes using different asset classes, not only equity or bonds, but also bringing in property. But that allows you not only to utilize your tax benefits associated to contributing to a retirement annuity, but it also helps you, if you invest, let's say through an online platform, to utilize your single discretionary allowance, you know, that one million rent that you have available annually to invest offshore, which, which now suddenly becomes almost like, you know, the perfect strategy, you can get tax benefits, but you can use your offshore allowance to get global exposure. You know, I think one of the key things that you highlight to that thing is so important. And we've certainly seen it, you know, during the past 18 months with the economic effects of COVID is that you want to make sure that obviously your investment portfolio in general, but as we're talking about your property investment portfolio in particular, that you if you wanted to be able to react to different macroeconomic activities in different ways, that one of the big things that we saw was that when you look, if you, for example, our landlord or were invested heavily in residential properties, those took rental figures, unfortunately, were not particularly great. And only now are they slowly starting to stabilise, but certainly for the past 18 months, we saw, you know, high vacancies in certain areas, many other areas not being able to collect the rental that you typically wanted. And whereas on the same breath, we saw that with office space, that was also quite a blood bath in many different areas with, you know, some companies even, you know, doing our way with office smaller companies needing to terminate their leases because they weren't able to meet their rental obligations. But then of course, when we looked at, you know, industrial property, that was actually doing quite well in instances in so much so that some of the guests that I've had would say that they're struggling to find stock for some of their clients that are looking at, you know, industrial property and needing quite a substantial size for it. And so when you've cushioned or certainly structured your property investment in such a way that it's diversified, you've got some retail, you've got some residential, you've got office, you've got industrial, you know that regardless of what macroeconomic factors can sort of happen, it may negatively affect one aspect of your portfolio, but it could actually, you know, in the same breath be leading to a really good return and high returns in other parts of your property portfolio. So understanding that becomes so important because I think so many of us when we talk about property investment, we're usually thinking about, you know, RISI, perhaps having our own couple of units or even at some point, maybe, you know, getting a few blocks of flats, but also just understanding that even with that model, when you've got that building, how can you make it a multi-use building so that you're not only having one form of income from that building. I think those are some of the things that are so crucial for us at home to always be aware of. But I want us to take a quick break, Rianne, and after this break, I want you to then look at what we should be doing or can be doing before in our 30s and 40s to sort of make the best retirement plans when it comes to our property investment as much as possible. Viewers at home know how much I don't like talking about retirement just because of the anxiety of it all, but I want to find out from you at home if you've already started planning for retirement and are you happy with where your retirement, you know, I'll say goals are, you know, have you been putting aside the kind of money that you want to be putting aside or investing, and of course working with a certified financial advisor or planner to help you along. You know, how is your retirement planning going? Are you happy? Are you not so happy with it? I want to find out from you at home, do drop us those messages down here below. But in the meantime, let's take a quick break, see who the lucky winner of that 1,500 rounds this evening is. I hope whoever they are, they are watching. It's quite a bit of money this evening, and I do hope that they're going to be able to claim it. Let's see who the lucky winners are. And this evening's winner is Umesi Nipipendi. Umesi Nipipendi is the winner this evening. Congratulations to you, Umesi. I hope that she is watching and will be claiming the prize. Remember to drop us a message down here below. Umesi Nipipendi, in order to claim that 1,500 rounds that is in the money bag. And as we continue our conversation this evening, I'm in conversation with Rihanna Fanife, who's a Chief Investment Officer at Welk My Great. We're looking at why diversified property investment is critical to your retirement plan. And I want to take some of your questions and comments at home. We've got a great question here. I'm coming through from Otando, Nohanda on Facebook saying, Hi Zama, I have a question. Speaking to you, diversification in the property sector, do you see possible development in the Eastern Cape for retirement villages? Seeing as retirees prefer the coast, could the Eastern Cape become a powerhouse in the nascent industry, sharing the stage with the Western Cape? Rihanna, I'll give that one to you. I've got my own take about the Eastern Cape, but broadly speaking, unfortunately when we look at the Eastern Cape, property prices, and perhaps it's not even unfortunate, it might actually be a fortunate thing. But we know that if you compare the Eastern Cape and the Western Cape, where property prices are concerned, there are worlds apart. And yet they are also by the coast. And one could argue, you know, have relatively similar amenities and potential for the Eastern Cape to, we'll say, be similar to the Western Cape. What's your take on, you know, on the Eastern Cape and the potential growth? And whether it may at some point be at the level as far as property and your property prices are concerned with the Western Cape is? It's a great question and making for that question. I think why retirement homes or retirement villages are so popular in the Western Cape is it's having a quality of life. And also it is very close to key amenities, you know, like hospitals and so on. So if we compare the Western Cape to, let's say, the Eastern Cape as you've done, as I'm a two-way, I think that the Eastern Cape also provide us with that opportunity of quality of life. In other words, outdoor lifestyle, outdoor opportunities, smaller towns, you know, a peaceful living. So I think if we can get stable infrastructure, stable services, and a property is well located within specific amenities and it offers a lifestyle choice, there's no reason why the Eastern Cape cannot become or match the Western Cape. And I also think what is very important, what we must remember is that developers of these retirement villages are smart people. So the moment that, you know, you get, first of all, potentially an oversupply of retirement villages, let's say in the Western Cape or your available land becomes less, they will definitely go and have a look at alternative locations. And that's where the Eastern Cape, for example, with its beautiful mountains, its beautiful outdoor life and definitely become a potential area or target market. Now, Rihanna, when we look at then, what we should and shouldn't be doing throughout different decades, you know, 30s, 40s, I want to focus primarily on those two decades. Perhaps just take us through when we talk about our property investment as part of our, you know, overall investment portfolio, what are some of the dos and don'ts in our 30s and our 40s that can certainly best position us for, by the time we retire, we know that you would have, you know, made all the right decisions and put all the right things in place. Perhaps share for those who are in their 30s and those who are in their 40s, how they should be looking at their property investment and what they should and shouldn't be doing in that particular decade. Yeah, I think there's two golden rules, whether you're 30 or 40. If we can start off with that, so you're in the 30s, I'm in my 40s, so we're right in that target market. The first thing is that, please, you know, property investment is complex. It is of a specialist nature. And unfortunately, we can become quite emotional, you know, when we get involved with property. So we always advise that buyers or individuals, persons make use of a specialist, make use of a wealth manager, make use of a financial advisor to guide you, to assist you, or, you know, a well qualified real estate agent. That's the first thing. I think the second point, golden rule of retirement is never cash in your retirement benefits. That is one thing that we saw over the last 18 months, you know, with COVID is that people started cashing in their retirement benefits to almost make ends meet. So, you know, although it's very difficult if your budget is not, you know, making start balancing, we really do not advise any investor to actually cash out their retirement savings. Then in terms of the 30s, I think, you know, a key focus there and speaking also to this retirement cash in is that in your 30s, you want to travel, you want to see the world, you know, you might not have kids. So do not only advocate all your money to, let's say, those kind of lifestyle decisions. It is quite important to make a start in property. Whether it is to potentially get a place, become a tenant and start saving for a deposit, that could be one strategy, or, you know, with technology coming to the fore, where you've got a company like wealth migrate, where you've got this crowdfunding platform, you can get an alternative to owning a property outright. By that I mean, for as little as, let's say, a hundred dollars, you can actually own a piece of property. So it's very important, as I'm a who are that people in their 30s, just even if they cannot afford it, start, find an alternative. Start, you know, waiting your close into property investments, whether it is through unit trust or, you know, using a crowdfunding platform to gain access to a real estate. I think that is quite important in terms of in your 30s. And please don't make the mistake, if you cannot afford it to take out a 30-year bond, instead of, let's say, doing the right thing to take out a 20-year bond, you know, rather downscale, than to, you know, take out an extended bond period, because you want that piece or that property. And then those in the 40s, Rianne, so those in your age groups? So if I take my friend, his biggest thing is, he is always, he doesn't have time to go and look for a place. So please go, if you need to upscale, if you have children and you need to get a bigger place, make the time to find that place. And a very good example, as I'm a who are was now hearing COVID, you know, where people were forced to sell properties, for example, that was an ideal opportunity to actually find a very nice property at an affordable price, you know, or an affordable monthly premium. I think another thing is, you know, don't overspend. People become, because they've got kids, for example, they become very emotional about their their purchase. And they tend to overspend. They see the big backyard. They see the housing, the cul-de-sac, for example, something they've always been looking for. And that tend to overspend. And also, I think what is quite important is, you know, rather potentially go for something older, but you could renovate over time that make it into your dream house. I think that is, that is quite important. And also, one thing that I just want to highlight. Many South Africans think that if I have a primary property, I shouldn't have more property exposure because of the price of it, the value of it. It's a very big part of my of my portfolio. And it's exactly what you're saying. That is a basic need. And it definitely will help you if you sell it. But if you look at retirement, it is so important to have other real estate in your portfolio. So don't make the mistake. You think I've got a primary residence, so I'm covered in terms of my real estate. You know, if anything, I always say to people, don't even look at your primary residence as an investment. It costs you a lot of money. When it's still bonded, it's also just fundamentally a big liability. You must almost think of any money you spend on it as money going to be flushed down the toilet. And as opposed to retirement money or investment money, because then it also has you thinking very differently about it because more often than not, we're not buying it because you're going to build, let's say, a nice cottage or double story townhouse and put a few tenants in. You're not doing that. And so you almost need to write off any kind of money that you're going to be spending there. Don't try to factor in potential capital appreciation, because you're probably not even going to adequately run those numbers or make the right call in terms of how much the property may potentially appreciate for. And so it really is a big thing to be able to recognize that your primary residence alone, unfortunately does not constitute, will say, part of your property investment portfolio. That's where you live. Whether you are renting, of course, and if you've bought, that is where you live. It's a basic need. We all need to be able to live somewhere. I want to go through some of the questions and comments that we've got here, men's in Utilesia on Facebook saying, yes, I've started with the retirement planning. I want to do it as early as possible, working with the various financial instruments ranging from low to high risk will yield a cumulative addition to the pension as it stands and rental income. And that's quite a big thing that you want to make sure that it's diverse about as possible. And as Rian said, you use different instruments and you use some of the sort of classical retirement products. And of course, you supplemented with your own different kinds of other, we'll say investment opportunities that you see outside. And before we close, I did say earlier, when we look at people who want to obviously diversify their property investment, the listed side is, we'll say that side is relatively easy, even in terms of getting their information and getting a good sense of how a REIT has been performing for the past, well, since inception really, when we look at the understood options, perhaps just key tips on how people should even be able to assess whether that is going to be a sound kind of investment or company that they can invest their money in. I'm seeing that there are quite a number of companies that are playing in that space, someone and even individuals say, you want an equity stake, I'm putting together this deal. And some of it sounds very, I think some of it is just packaged really well and sounds enticing. But unfortunately, not everybody has an eye for sussing out whether they're being scammed, whether these people even know how to make sound property investment decisions. So for the viewers at home, how can they best sort of get a good sense of whether a company or even an individual who says that they've put together a property investment offering that they want you to either put in some of your money, whether it's on a monthly basis or X amount of equity in it? How can we best suss out whether they are legit and have the expertise that they are saying they have in order to give you the returns that you're potentially looking for? Excellent question once again, Zomitumba. And I think there's two sides to that question. The one is what you look for. And the other one these days with fintech and technology, there's tools. So I'm going to focus on what you look for. So I think the golden rule is do not be fooled by excessive returns. Those returns are excessive to lure you into that investment to basically steal your money. Right, so that's the first key thing. So a few things that I think is very important. You know, oh, and the second thing that I think is very important, don't do this kind of business with family and friends. Right, because it normally tends to end in sorrow. Okay. So the first thing is look at, but if that person or company has a niche skill, you ideally want to work with someone that start experience in residential or let's say light industrial or let's say commercial or retirement allegiance. So that's the first. The second point is look at for how long they've been in business and what is their relevant experience. So a rule of thumb is typically you want to do business with a company that's been existing for five years and between let's say the key partners or the key decision makers, you want a minimum combined experience of let's say 20 years. The next thing that is quite important is look at the team. If they say, for example, they do a turnkey solution, make sure that that team has enough depth or breadth that they can cover all these aspects of, you know, a turnkey solution. And then lastly, what we really advise is asking about the tracking, which properties that they did, but more importantly, which properties went south, which properties didn't work out as you'd expect it and why, because we make mistakes. But if you end up six out of 10 properties not working out and they keep on making the same mistakes, a big red flag. Right. So those are just some key things that I think investors should look at. Then tools with the fintech, you know, wealth migrate, for example, is a crowdfunding platform. It's an online platform. And there's a team that conducts a deal diligence on each opportunity. And there's information and documentation put online for investors to work through so that they can make an informed decision. And what is so attractive about this is, you know, crowdfunding is a model where lots of people put little amounts in to make a big investment amount to invest into a property. So you can actually gain exposure, for example, to an industrial property with a smaller amount. So look at these online platforms as tools that provide you with needed opportunities and provide you with documentation and information to make an informed decision. No, Rian, that is a great place to leave it at this evening. Thank you so much for joining us on the show. Thank you. And it was very enjoyable. Thanks for the opportunity. And that is Rian Falifefo, who's a Chief Investment Officer at Wealth Migrate, wrapping up the Tuesday edition of the Private Property Podcast with myself, Ozamando Moa Kumalo. And Omezi Nipipendi has indeed messaged us and she walks away with that 1,500 rands in this evening's competition. Congratulations to you, Missy. And that means tomorrow we're back at 500 rands in the money bag. Remember to go to our Facebook page and comment on the pinned post. And the more times you comment, certainly the higher chances of you winning. Well, it's my time to sign off this evening. Of course, you can look forward to unbending work on the farming podcast at 8pm. I'll be back on your screens tomorrow evening at 7pm until then, hoping you're staying home and staying safe.